Linn Group Morning Corn Comment

CHICAGO - May 4/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Nothing new in the corn market on Thursday as the market shook off the
weaker than expected weekly export sales to rally higher on the forecast for
rain and possible planting delays.  If this seems to be the reoccurring
theme the last couple of days, you are correct.  There is little new news
the last couple of days with traders watching the different weather
forecasts with great interest, trying to decide which one is correct and how
much corn has been planted this week.  Both the July and the December closes
about 7 cents higher after being almost 15 higher in the July.  Volume was
relatively heavy at 256,000 contracts and the funds were very active buying
between 10,000 and 14,000 contracts.  Traders continue to talk about the
middle of May as the magical date before yields start to go lower, but there
seems to be little talk among farmers that they are going to change their
planting intentions.  The high price of corn is a great incentive to plant
corn, even if it gets into the ground a little late.  Spot basis bids in the
US were steady as farmers concentrated on the planting.

eCBOT market was very quiet overnight closing slightly higher in the July
and 1 ½ higher in the December.  Traders around here thought we would see
corn set back overnight after yesterday’s rally and were a little surprised
to see it hold up.  Weather remains the focus for the corn market and I
would expect to see traders squaring positions in front of the weekend as
weather forecasts can change and you have no way to protect your position
for 2 days.  Historically, it is tough to buy spring rally’s that are based
on rain, but these are not normal times with the number of acres being
planted this year and the demand for corn to only get bigger.  A rally in
the spring is based on guesses, are the acres going to get planted? Is their
going to be yield reduction if corn is planted late?  There is no way to
answer these questions today, thus maintaining a rally.  Look for the corn
market to open unchanged and look for direction based on weather forecasts
or traders squaring positions into the weekend.  There isn’t expected to be
any other real news out for the corn market.  Some traders think the corn
market is rallying right now, trying to trap the longs before we see a big
sell off because the corn acres got planted.  Something to keep in mind.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCK7                380^0    0^2                   380^4    379^0

ZCN7                390^0    0^6                   391^4    388^2

ZCU7                388^2    1^2                   389^6    387^0

ZCZ7                 389^0    1^6                   389^4    386^4

Early Opening Calls: steady

Top News

-- S Korean feed assoc member remarks sharply higher shipping costs are
making grain merchandisers double think buying decisions.

-- Japan Ag minister proposes to use up to 10% ethanol, up from the
voluntary 2% blending requirements currently in place.

-- Traders report Israel buys 7,000 mt of Soymeal & 35,000 mt of corn
products (gluten & DDG), but no corn was bought

-- Dalian Corn futures on Holiday

-- eCBOT Vol: 176,203; Pit Vol.: 83,946; Open Interest change: +3,460

-- May Corn CBOT Daily Deliveries: 1,267

-- Outside markets. Energy higher; US $ mixed to lower; Gold & Silver:
higher

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

May      -5/+1 N             +24/26 N             +3/?? N           +60/ N
215

June     +3/10 N             +28/31 N             +3/?? N           +55/ N
225

July      +12/17 N           +32/36 N             +5/?? N           +55/ N
250

Truck                Beans   Corn    Wheat              Meal Hi-pro
Oil

Chicago                       -35 N    -0 N     -40 N

Toledo              -40 N    -19 N   -50 K

Dec ILL            -30 N    -5 N                            -10 N
-200 N

TREND:

Corn got above the 3.90 level and triggered technical buy stops but closed 6
cents off the highs. Planting delays getting a lot of play with wetter
forecasts today. One forecaster, well known for being flamboyant reportedly
sent a message to subscribers that there would be little corn planted in the
coming two weeks? Silly---problems yes but not totally prevented? Hard to
keep these planting delay rallies going in May days. Bigger deal when we get
closer to Jun days.  Moving Avg is 100 day.



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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