Linn Group Morning Corn Comment

CHICAGO - Apr 17/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn was lower on Monday as the prospects of better weather for planting
were forecast over the next week or so.  Both the May and the December
contract closed almost 5 cents lower after some of the rain was taken out of
the forecast allowing many farmers into the fields for the first time this
year.  Many farmers have to wait until the fields dry out but at least there
isn’t any rain forecast for this week.  The sell off wasn’t significant
because there still isn’t much corn planted and it remains cool, not exactly
excellent conditions for raising the soil temperature.  Field work can get
started, but planting won’t begin in earnest until the soil temperature
comes up.  Volume was light, with most of the volume coming in the roll out
of the May contract and funds sold app. 3,000 contracts.  Export news helped
corn yesterday as it was confirmed that So. Korea is seeking 450,000 tones
of US corn for October and November delivery.  Overall, traders said volume
was very light as traders wait for the release of the USDA planting progress
report after the close and the market waits to see if corn acres are going
to get planted.

eCBOT market was higher overnight based off the crop progress report that
was released after the close.  Specific details are below, but the bottom
line numbers showed planting progress at 4% complete vs. 8% last year and 9%
5yr average.  The key is probably the lack of almost no corn planted in the
key corn producing states of IL, IA, and NE.  Next week, we will look for a
increase to 25% last year and 23% on average, a big jump.  After we have
digested this report, traders will turn to their weather maps again.  If the
forecast is cold and/or wet, they will continue to point to the crop
progress report, if the forecast is dry, they will have forgotten about this
report by 10:30 this morning.  Expect more volatility this week as everybody
awaits the latest weather forecast and traders willing and able to sell
rallies in corn at least for another week or so and we are officially behind
in planting corn.  Remember, most of the corn in the US isn’t planted until
after April 20th, so there is still plenty of time and you know farmers are
sitting on their machinery in the barns just waiting to go.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCK7                367^0    2^6                   369^6    366^4

ZCN7                379^0    3^0                   381^6    378^4

ZCU7                385^4    3^4                   387^0    384^0

ZCZ7                 393^0    2^6                   395^0    392^4

Early Opening Calls:  2 to 3c higher

Top News

-- US corn plantings lag in key states of IL, IA, NE, MN, OH.  Overall, corn
plantings were 4% complete vs. year ago 8%.

-- Argentine corn harvest progresses slightly;  34.1% total harvested, which
is +2.8% more than last week, but -1.2% less than last year's pace, acc. to
BAGE

-- 07/08 corn production in Canada expected to rise to 11.1 mln mt from 9.3
mln mt in 06/07, USDA attaché report suggests the rise in corn is due to
ethanol demands.

-- Traders report South Korean livestock feed manufacturers decline to
exercise 495k ton US corn tender due to high prices

-- Fund trade slowed from Friday’s pace Monday. Funds  sold 3,500 Corn--
Dalian Corn futures were higher overnight.

-- eCBOT Vol: 145,068; Pit Vol.: 52,091; Open Interest change: +3,934

-- Weather Normal to Above Temps. Normal to Above Precip.

 6 to 10 day outlook shows

-- Outside markets. Energy higher; US $ lower vs. Yen & Euro; Gold & Silver
lower against both.

Cash Markets

-- CIF Corn:  Apr. +24 to +26, LH Apr. +25 to +26, May +29 to +31, June +25
to +28, July +30 to +32, Aug. +30 to +34, Oct. +29 to +33.

TREND:

The crop reports will have the night session sharply higher led by wheat.
Look for Chi to be 7 to 10 higher but could be more. KC will eventually gain
more than Chi but will play catch up tonight---another chance to do that
spread? Retain bull spreads on KWK as the trade will again look for a sure
thing. Basis levels have tended to soften over the weekend in hard wheat as
soft continues to firm, Assume this is due to the extreme discounts of soft
wheat over the last month.

Corn will be 3 to 5 higher on the planting delays. This is also a potential
chance to get wheat going too hard over corn. Appears to WN at 125 over CN
has more than rallied enough. Do not do this trade in KC wheat because of
the potential gains there are considerably more than in Chi.



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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