Linn Group Morning Corn Comment

CHICAGO - May 2/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The new crop December led the corn market higher on Tuesday after the USDA
crop progress report showed corn planting lowering than expected and behind
the 5 yr. average.  The July contract closed 10 cents higher and the
December closed 14 cents higher.  Funds were net buyers of 5,000 contracts
by the end of the day after early selling.  Traders on the floor said the
early fund selling was index fund rebalancing, not fund liquidation by trend
followers.  Many traders seem to be saying completely opposite things, with
one side saying corn plantings are behind and there is the real danger that
farmers won't get as many acres planted as estimated and on the other side,
traders saying that corn plantings are behind, but there is still plenty of
time to plant corn and the weather looks clear.  As to which side is right,
it is anybody's guess, but historically, the acres get planted and there is
extra incentive at these higher prices.  Traders also pointed to a little
change in the weather forecast yesterday, midday, bringing the possibility
of more rain into the near term forecast.  This helped push the December
higher and dragging the old crop higher with it.

eCBOT market continued higher overnight no the back of the increase in the
chances of moisture in the weather forecast.  The July and December were
both up over 3 cents overnight on relatively light volume.  Goldman Sachs
also put out a buy recommendation on new crop corn after the close
yesterday.  Weather remains the dominant factor in the price of corn as
traders continue to watch the weather forecasts and try and predict the
weather in coming weeks.  Because of the late start in planting, weather is
that much more important.  On the other side, a lot of corn is getting
planted this week and I think traders are waiting for the USDA crop progress
report released next Monday afternoon.  Look for corn to open higher today,
2-3 cents, but many traders still think corn is trading in a range and will
want to fade a rally today, especially if the corn market gets another 7-10
cents higher.  Traders will be hesitant to step out and buy into new highs
or sell into new lows, until there is a better idea of how much corn gets
planted.  Once traders have an idea of the number of acres planted, then
they can start to worry about yields.  Exports remain strong and traders
await the weekly export sales tomorrow morning for confirmation of these
strong sales continuing.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCK7                370^0    2^4                   371^0    366^2

ZCN7                380^6    3^2                   381^6    376^0

ZCU7                381^0    3^6                   381^4    376^0

ZCZ7                 382^0    3^4                   382^4    376^6

Early Opening Calls: 2 to 3c higher

Top News

-- Large Philippine food firm consortium commits to buy 64,640 T corn from
planned NFA tender scheduled for May 17.

-- Group of Israeli companies buy 14,000 T of US corn & corn products
(gluten & DDG) totaling 35,000 T.  Group was also interested in US Soymeal,
traders say the volume is 7,000 mt.  All products were expected for mid June
shipment.

-- USDA Keith Collins testifies to House Ag subcommittee on Federal crop
insurance. Says more risk management tools have come to producers, but more
work needs to be done.

-- 80 new biodiesel plants expected in the United States - will more than
triple production to around 2.9 bil gallons within the next 2 to 3 years,
acc. to NBB statistics

-- CBOT April Agriculture average daily volume rises in April 2007 by 49%
compared to avg daily volume in year ago April. April's ADV in the CBOT
Agricultural complex set a record - 777,082 contracts, 49 percent greater
than April 2006.  Increased electronic trading volume contributed to the
higher volume totals in the Agricultural complex.

-- Dalian Corn futures closed for week long holiday.

-- eCBOT Vol: 161,929; Pit Vol.: 90,253; Open Interest change: +5124

-- Outside markets. Energy lower; US $ higher; Gold & Silver both lower

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

May      -2/+2 N            +24/26 N             +0/?? N           +75/ N
225

June     +7/11 N             +30/32 N             +3/?? N           +55/ N
225

July      +8/142 N           +34/37 N             +5/?? N           +55/ N
250

Truck    Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago            -25 K   -6 K     -38 K

Toledo   -36 N   -19 N   -52 K

Dec ILL -30 N   +0 K               -12 N                -200 K

TREND:

Today's rally in the July corn has only put us in the middle of a 3.60 to
3.90 range. Would like to be a short again in the July corn from 3.85 to
3.90, but we have to watch for the December contract. The Dec is getting
into an area that should find some problems between 3.85 and 3.90. A close
over this level would have to make us take a new look at the market. In
order to sustain a bull trend, the fronts should be the leader, so with the
Dec leading today, despite closing on the highs, one would have to show
caution.



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.