Linn Group Morning Corn Comment

CHICAGO - Mar 9/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Corn closed lower on Thursday after being higher/unchanged most of the day.
The market reacted higher to the export sales, but as we have seen over the
last couple of weeks, it was hard to impossible to extend the highs.  The
May contract sold off late in the day on mostly spread trading as one of the
big firms sold 3000 December with the locals buying December and selling the
May.  On top of this bear spreading, we are starting to see traders roll
their positions from May and July into Dec as many traders want to be in the
new crop contract because if there is problems this spring, many feel this
is where we could really see the price action.  After the market closed, the
head of the union in Argentina announced the end to the truckers strike, so
everything should be back to normal.  A lot of ethanol talk again yesterday
as corn is trading right inline with the energy markets and with the ethanol
market.  Today, cash ethanol is a very closed market and it is difficult to
find out where cash ethanol is trading and specs can't trade the futures
contract.  That will change going forward as it becomes a more viable
commodity, but today, it is difficult to gauge.  Funds were net buyers of
1,000 contracts yesterday.

eCBOT was a little higher this morning before the release of the USDA report
this morning.  The USDA report was as expected a non-event with the minor
numbers coming in as expected for corn.  The only real change was the
decrease in So. African corn to 7mmt vs. 9.5, but world ending stocks were
only down slightly.  Look for the market to have little reaction to the
report.  President Bush is to sign a biofuels pact in Brazil today with
little details revealed, but you can guess it will include the import of
more ethanol than current levels.  Look for the corn market to open higher
this morning and look for the market attempt to extend the rally.  Remember,
today is Friday and it seems like the funds want to play a little harder on
Friday's and some traders think the funds will be in to buy the corn market
today.  Some traders think the market came in negative today prior to the
release of the USDA report looking for a lower export number, which we
didn't happen.  Once again, I think the funds control the corn market with
the lack of any new news and the market will go whichever way they want it
to go.  Nothing has changed, the demand for corn is still very strong and
the ending stocks are very low, so the margin for error in planting corn is
small.  Weather forecast seems to warm up in the next 6-10 days which is
good for corn plantings as we will see soil temperatures increase.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCH7                413^4    1^4                   413^4    410^0

ZCK7                423^6    2^2                   423^6    420^2

ZCN7                433^0    2^2                   433^0    430^0

ZCU7                420^4    0^4                   421^0    418^0

Post Report Opening Calls:  1-2 higher

USDA Report Headlines:

**US Mar Corn 06/07 Carryout: 0.752 bln bu. ; est. 0.76; Feb Rpt 0.752

**World 06/07 Corn Carryout: 87.79 mmt; Feb Rpt 87.95

**March Argentina 06/07 Corn Output: 21.50 mmt; Feb USDA Rpt: 21.00

**March South Africa 06/07 Corn Output: 7.00 mmt; Feb USDA Rpt: 9.50

**March China 06/07 Corn Output: 143.00 mmt; Feb USDA Rpt: 143.00

Top News

-- 4.1 million acres expected to exit the USDA' s Conservation Reserve
Program:  34% of which is in corn producing regions - results consistent
with past re-enrollment figures, acc. to USDA Secretary Johanns

-- Informa will release planting estimates Tuesday.

-- Brazil's Ag Minister says Brazil could supply Japan with it's Ethanol
needs. Japan has started mixing gasoline with 3% Ethanol.

-- Argentine's truck strike has ended.

-- Chinese Soybean, Corn, Meal and Oil futures closed lower.

-- Corn spreads: IA 1,000 CN/CK, UBS 1,000 CN/CZRJ 300 CN/CZ, JPM 200 CN/CZ

-- China's Ministry of Finance announced today that it will create an agency
along the lines of Singapore's Temasek Holdings to manage it's $1.07
trillion in forex reserves.

-- 6-10 day forecast shows above normal temps, below normal precip

-- Outside markets:  metals mixed, energies higher, dollar higher against
most major currencies.

-- Volume was 218.5, with open interest up 3.5 to 1445.8

Cash Markets

-- CIF Corn:  Mar. +28 to +30,  Apr. +30 to +31, May +34 to +36, June +30 to
+33, July +32 to +36, Aug. +33 to +38, Oct. +30 to +34.

TREND:

The chop continues with trade waiting for the Mch 31 stocks and acreage
intentions. Too much effort to drive the market some place---not going to
happen either up or down for a while.



If you have any questions or want to discuss specific trade recommendations,
contact me directly.

Jim Riley
Linn Group
877-787-6278
jriley@linngroup.com
www.linngroup.com/

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