Linn Group Morning Corn Comment

CHICAGO - May 7/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market took a breather on Friday even with the market closing
higher with the July up 1 ½ and the December up 3 ¼, as we didn’t see the
big ranges and market volatility we saw all week.  Weather remains the focus
for the corn market as rainy weather in parts of the Midwest is delaying
corn planting and the corn market is being led higher by the new crop
December.  The weather forecasts are mixed and the market remains fixated
with the USDA release of the crop progress numbers after the close today.
The weather forecast has increased rain, but also higher temperatures.  As
one analysts said on Friday, you don’t want to see the increased rains,
especially in areas that don’t have any corn planted, but at least the temps
are going to be in the 80’s and not the 50’s.  Volume was light compared to
recent days and funds were light buyers of app. 2,000 – 3,000 contracts.
The demand, especially from ethanol producers remains very strong, thus
making it doubly important to get the corn in the ground so there isn’t a
reduction in yield.  Remember, the magic date that farmers like talk about
is May 10th.  Corn planted after this date is likely to lose yields after
this date, but new seeds may extend this date.

eCBOT market was higher overnight on rains over the weekend delaying
planting, but the market closed 6-8 cents off its highs with the July
closing 3 ½ higher and the December closing 4 higher.  Traders this morning
will be looking for the release of the USDA crop progress report after the
close today.  Last week, the USDA reported that only 23% of the corn was
planted, but many thought this number was too low.  This week, estimates
range from 40-50% of the corn planted, below the 5yr average of app. 63%.
As we have said, these numbers can be made up in a hurry with a week of good
planting, but farmers would like to see the number of acres planted up
toward the 5yr average by next Monday.  Argentina made progress in
harvesting after rains this April have delayed harvesting.  Corn should open
in line with where the market closed this morning, but traders will be
keeping an eye on the different forecasts.  The window to plant corn this
week appears good for much of the growing area, but the possibility of rain
will keep a premium built into the corn market.  The December contract
should lead the corn market higher with the July having trouble keeping up.
The bottom line is there is probably going to be less acres planted this
initially thought a couple of weeks ago, but many analysts already had a
reduction in acres, so I don’t know how important this is to the market
today without any confirmation in a reduction in acres.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCK7                383^6    2^4       390^0    382^0

ZCN7                393^6    3^0       401^0    393^2

ZCU7                394^0    4^4       399^0    394^0

ZCZ7                 395^0    4^4       401^0    393^4

Early Opening Calls: 3 to 5c higher

Top News

-- USDA weekly export inspections today.

-- USDA crop progress to be released this afternoon.

-- Friday will be USDA production & stocks estimate along with world
estimates.

-- Brazil Ag minister estimated 07/08 ethanol production at 5.28 bln gals a
rise of 13%, vs. the 06/07 sugarcane season

-- Turkey late last week bought 55,000 mt of Black Sea corn at $233.20 C&F.

-- May 16 Jordan for 100,000 barley for Jun.

-- Dalian Corn futures back from week holiday closed mixed Monday.

-- eCBOT Vol: 122,315; Pit Vol.: 47,147; Open Interest change: +2,561

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

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

May      -8/-4 N +25/26 N             +3/?? N           +60/ N
215

June       +3/6 N            +29/31 N             +3/?? N           +53/ N
225

July      +11/15 N           +33/35 N             +5/?? N           +53/ N
250

Truck    Beans               Corn     Wheat   Meal Hi-pro        Oil

Chicago            -35 N              -5 N      -40 N

Toledo   -40 N              -19 N    -50 K

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



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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