Linn Group Morning Corn Comment

CHICAGO - Apr 11/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market shook off the higher stocks number and lower opening to
close higher with the December contract leading the market higher as weather
once again moves to the front of every traders mind.  As some traders said
yesterday morning, the market would trade the stocks number early in the
day, but at the end, it is all about the weather and getting corn planted.
Crude oil was higher after Monday’s break, helping push corn higher.  Volume
was pretty strong, helped by the rolling of the May contracts, and bear
spreading.  Cool/wet conditions are making it impossible for farmers to get
into the fields and not just plant corn, but get the fields ready to plant
corn.  Talking to farmers, very few seem concerned yet because with these
high prices, they will plant corn later than usual, but yields will be
affected negatively.  Bears want to talk about a reduction in demand by feed
users as they have moved to cheaper alternatives, such as feed wheat and
DDG, an ethanol by-product.  Some traders feel this reduction by feed users
will get bigger in later USDA reports.  Weather is the wild card right now
and in 6 weeks, traders will probably go back to the larger stocks number
and point to that data as a reason to sell corn.

eCBOT market was pretty quiet overnight with the May up almost 2 cents and
the December up ½ cent.  Weather continues to dominate the corn market as
the cold/wet pattern stays across most of the Midwest with the northern
areas receiving significant snow.  This weather remains the catalyst for
pushing corn off its lows, but remember, corn will get planted and the old
crop prices will be negatively affected more than new crop prices.  We have
seen corn move 40 cents off the lows on the weather news and I don’t know
how much more today the corn market can move higher.  Remember, we almost
always see a break in corn and beans in the spring as crops get planted and
with today’s higher prices, breaks will probably be bigger than normal.  It
looks like corn will be higher this morning, but different traders I have
talked to you this morning want to sell rally’s so be careful getting long
up at these levels.  Options offer an excellent way to protect your hedges
or speculate while limiting your risk.  Rally’s in corn also offer a good
opportunity to buy puts, especially in the July and to a lesser extent the
September.  Any change in the weather forecast reducing the rain or getting
warmer will send the corn market into a tailspin and push wheat to the front
of the grain complex as traders look into their crystal balls and try and
figure out the damage to wheat from last weeks freeze.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCK7                370^6    1^6                   372^4    367^4

ZCN7                382^6    1^4                   384^6    379^6

ZCU7                388^2    1^4                   390^2    385^2

ZCZ7                 395^0    0^4                   398^0    392^6

Early Opening Calls: steady to 2c higher

Top News

-- Taiwan may issue tender for 40k-60k tons of corn, origin = Argentina/US,
acc. to traders

-- Export News: Philippines bought 120,000 mt. Argentine Corn for
June/July.-- 2007 US Corn production at 12.995 bil.bu. estimated by Informa.
They also estimated 90.4 mil. acres planted and 83.0 mil. acres harvested.

-- China's Ag Ministry sets mark of 150 mil ton corn production by the year
2010;  hope to use modern technology to accomplish this

-- Reuters is reporting that period charter rates for modern Panamax
tonnages plying the transpacific route are about $42,000, or about 10%
higher than the end of March.

-- 2007 Poultry production to rise to 1.8 mln mt in Russia from 1.55 mln mt
in prior year.

-- An 8 year, $22.5 mln biofuel research grant given to Iowa State by
ConocoPhilips

-- Dalian Corn futures settled higher, however overall volume fell.

-- eCBOT Vol: 214,542; Pit Vol.: 111,036; Open Interest change:-16,821

-- Weather Normal to Below Temps. Normal to below Precip. the 6 to 10 day
shows

-- Outside markets.  Energy markets slightly higher ahead of weekly stocks
report; US $ slightly higher against Euro & Yen ; Gold & Silver higher

Cash Markets

-- CIF Corn:  Apr. +23 to +26, LH Apr. +26 to +28, May +30 to +32, June +26
to +28, July +29 to +33, Aug. +?? to +34, Oct. +28 to +32.

TREND:

The corn market met near term targets with last week’s break, and was helped
out today by the strength from wheat. The December contract in corn should
see better support on breaks



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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