Linn Group Morning Corn Comment

CHICAGO - Apr 10/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market shook off the cold/wet weather yesterday to close lower in
the May contract and slightly higher in the deferred contracts.  The market
opened strong, but couldn’t get any follow thru and went lower almost
immediately.  As one trader said, if you can’t get a market to rally on
bullish news, that is bearish.  Traders said the market tried to bring back
the corn bull market and just couldn’t find any support after the initial
buying on the opening.  As we have been saying, the weather forecast is not
conducive to corn planting, but we still have plenty of time to plant corn
and that is what the bears are preaching.  Very volatile trade yesterday as
the May contract had a 24 ½ cent range.  Some traders point to the corn as
being ripe for profit taking on the rally because it had rallied 40 cents
off the lows on talk of weather and there is still plenty of time to plant
corn.  Funds were active at selling 4,000 contracts, but not real big as you
might have expected.  The demand for corn is very strong and that is the
only thing from having big selling in corn.  China is still a wild card as
their demand remains very strong, but they are more inclined to increase
domestic production than to turn to imports.  Crude oil being down $2.50
yesterday didn’t help the corn rally either.

eCBOT market was pretty quiet overnight closing app. unchanged in the May
contract and a little higher in the December.  The Goldman roll started
yesterday, so you will see some pressure on the May contract as contracts
are rolled to July.  Crop progress report last night was a non-event for
corn as most corn planting hasn’t started yet, 3% planted vs. 3% 5yr
average.  The weather forecast remains cold/wet for the next week or so, but
that doesn’t seem to stop traders from selling corn.  We will probably have
to see another 2 weeks of no corn planting in the heart of the Midwest
before traders get scared.  USDA released their monthly crop report with
traders looking at the stocks.  Average estimate was .826 and the USDA came
in at .877, a little above the estimates, but not unexpected as the market
saw an increase in wheat feeding in the March report, so they expected corn
stocks to be higher.  The corn market has 2 sides pulling at it, with the
bears pointing to higher stocks and huge acres estimated to be planted and
on the bull side pointing to huge demand and terrible planting weather.  The
bears are winning and trying to get corn to rally is like trying to swim
against the river as one trader said this morning, it is going to be
difficult.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCK7                363^6    0^2                   366^4    363^4

ZCN7                375^6    -0^4                  379^0    375^6

ZCU7                381^0    1^0                   383^0    380^4

ZCZ7                 387^6    1^2                   389^6    387^4

Post Report Opening Calls: 2 to 3c lower

USDA/WASDE Report

-----------------

**US Apr Corn 06/07 Carryout: 0.877 bln bu. ; est. 0.83; Mar Rpt 0.752

**World 06/07 Corn Carryout: 91.82 mmt; Mar Rpt 87.79

**Apr China 06/07 Corn Output: 143.0 mmt; Mar Rpt 143.0

**Apr Argentina 06/07 Corn Output:  22.00 mmt; Mar Rpt 21.5

**Apr S Africa 06/07 Corn Output:  6.0 mmt; Mar Rpt 7.0

Top News

-- The Weekly Crop Progress report shows Corn planting 3% complete vs. 3%
last and 4% average.

-- Chinese Corn exports in March were 1.1 mmt. and added all Corn export
contracts signed last year have been completed. No new Corn export quota’s
have been issued for this year.

-- China's customs bureau said today that the March trade surplus only rose
$6.87 billion, 38% smaller than the gap a year earlier.

-- Funds sold 4,000 Corn on Monday.

-- Dalian Corn futures were mixed with nearbys lower, deferred contracts
higher

-- eCBOT Vol: 219,951; Pit Vol.: 108,376; Open Interest change:-4,011

-- Weather: Below Normal Temps. Above Normal Precip. 6 - 10 day shows.

-- Outside markets: Energy higher, US $ lower, Gold & Silver higher

Cash Markets

-- CIF Corn:  Apr. +23 to +25, May +29 to +32, June +24 to +27, July +28 to
+33, Aug. +?? to +34, Oct. +27 to +33.

TREND:

Back to school here. Trade seemed to be predisposed to sell the corn rally.
Understandable. The night session saw CZ back to 4.06 for a high and that
completed all the Fib retracement in 3 days trade. Velocity has been pretty
wicked here so should not have been surprised at the sell off. Still feel
the lows of last week will hold here and the rally is a statement about what
needs to happen to get the market back into a positive trend---real damage
or some more exuberant demand. The damage to Kan wheat could lead to larger
sorghum acres in the western part of the state.

Wheat rally failed just like the corn. And the trade was very similar with
the rally taking prices back to the middle of the WN trading range that
stretches back to Nov. Made down side counts last week and now we spend some
time in a larger range until we see some actual damage. Have to note that
the export interest has picked up a notch. May have to do with a hole in
world supply until we get to new crop in Europe.



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/

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.