Linn Group Morning Corn Comment

CHICAGO - Mar 12/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed lower on Friday as we saw outside market decline and
there was little new news for the corn market.  Because ethanol has become
such a big part of the corn market, it will follow the lead of the crude
market.  Traders also pointed to the corn/wheat spreads as we saw more
liquidation on Friday.  Some traders said there is still more liquidation to
be done.  We also saw funds rolling from the old crop to new crop as that is
where the market is expected to see the most appreciation in coming months.
The USDA supply/demand released on Friday was neutral and little bearing on
the market.  Funds were net sellers of app. 5,000 contracts by the end of
the day.  The March 30th planting intentions report now takes on greater
significance and will attract most of the traders attention because of the
need to add so many corn acres to keep up with demand, especially from
ethanol and exports.  Weather takes on added significance as we approach
planting, but so far so good as late winter storms has added soil moisture
and the warm up in coming weeks should help get the ground ready to plant.
This should add pressure to the corn market in coming weeks, assuming
conditions don't change.  Volume was relatively light.

eCBOT market was a little lower overnight on light volume with the May
contract closing slightly lower.  Very light news day today as we expect the
corn market to chop around looking for direction in anticipation of the USDA
report in a couple of weeks.  Informa, a respected grain analyst, is
expected to release their acreage estimate on Tuesday and the market will
react to their numbers.  This will be the beginning of analysts releasing
acreage estimates.  Look for the corn market to open a little lower and then
look to the funds for direction.  I believe we will see two sided traded
with traders probably looking to buy a lower corn market.  A lot of
spreading going on and we expect to see more of that trade today as well.
Weather will be closely watched for any indication of a delay in planting
which is the biggest worry among traders.  Look for the market to chop
around today.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCH7                406^0    -2^2                  408^2    405^0

ZCK7                416^6    -0^6                  419^0    414^4

ZCN7                426^6    -0^6                  429^0    424^6

ZCU7                416^0    -0^6                  417^0    414^0

Early Opening Calls:  1 to 2c lower

Top News

--Pres. Bush urges the US to develop feedstocks for ethanol to reduce impact
on livestock producers- in interview to air Monday night.

-- "Announcement mistake" leads to wrong CRP number:  4.6 mil acres to leave
CRP between '07-'10 - originally quoted as 4.1 mil acres in a public USDA
statement

-- Informa to release Corn and Soybean planting estimates this week.

-- Grain exporters note South Korea may be buyers of corn and/or wheat in
the coming week

-- Decline in farm acreage, lack of water, to hurt Chinese agriculture in
the future, acc. to top economic planning agency

-- At the Dalian exchange in China Soybeans closed mixed, Corn, Meal and Oil
lower

-- Ukraine returns to the grain export market in February with 20k tons of
wheat, 220k tons of barley, and 88k tons of corn shipments, acc. to ProAgro
Consulting

-- The Commitment of Traders report with Options as of March 6 shows Funds:
Corn  Long  305,707  off  40,341

-- Deliveries:  Corn 115 no stopper

-- Corn spreads: Tenco 500 CK/CN, 200 CK/CN, Fimat 200 CN/CK, JPM 400 CN/CZ

-- 6-10 day forecast shows above normal temps west, below in east, normal to
below precip

-- volume was 176.7 with open interest down 2.3 to 1443.5

-- Outside markets:  energies lower, metals lower, dollar mixed vs. major
currencies, stock market lower.

Cash Markets

-- CIF Corn:  Mar. +28 to +31,  Apr. +30 to +32, May +34 to +36, June +30 to
+33, July +32 to +35, Aug. +33 to +38, Oct. +30 to +32.

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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