Linn Group Morning Corn Comment

CHICAGO - May 15/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Traders said profit taking was the main ingredient for the sell off on
Monday along with good weather for corn plantings that had been delayed
because of rain.  After the surprise USDA stocks number on Friday and the
rally, traders decided to take profit, especially in front of the crop
progress report to be released after the close.  The weather remains
excellent for finishing the corn plantings, so traders sold the market in
anticipation of a good USDA crop progress report number.  The early rally in
corn was helped by the strong move higher in the soybean oil and soybean
futures.  Exports were quiet over the weekend.  Volume was light to moderate
and funds were active selling app. 3,000 contracts by the end of the day.
Some traders want to talk about frost later in the week burning back emerged
corn, but the damage should be limited.

eCBOT market opened a couple lower overnight only to sell off into the close
this morning so the July closed 7 ½ lower and the December closed 6 ½ lower.
The USDA released their crop progress numbers after the close and it showed
78% of the corn planted vs. 83% last year and 77% 5yr average.  This was
above expectations and will be looked at negatively, especially because the
% emerged was above the expectations.  After the USDA confirmed the acres
planted, most traders feel it is a foregone conclusion that the corn will
get planted, now it will come down to when it was planted and weather.  It
may seem hard to believe, but some farmers are starting to talk about
needing rain to get this corn kick started, after rain delayed planting.  We
look for corn to open in line with the close overnight, but the market
should find some support, especially if we get down to the lows last
Thursday.  Not a lot of new news out about the corn market today so the
market will probably be pretty choppy with traders selling the market until
it finds support.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCN7                355^6    -7^4                  359^4    355^2

ZCU7                360^4    -8^0                  365^4    360^4

ZCZ7                 364^4    -6^4                  368^4    364^0

ZCH8                376^0    -7^0                  381^0    376^0

Early Opening Calls:  5-7 lower

Top News

Corn Progress & Conditions Mini-Recap

Corn % Planted:  78%; 53% week ago; 83% yr ago week; 78% 5 yr avg.

Corn % Emerged:  39%; 14% week ago; 41% yr ago week; 36% 5 yr avg.

-- Export News: Israel tendering for 56,000 mt. US or South America Corn for
June/July

-- Export News: Turkey may soon tender for 500,000 mt. opt. org. Corn

-- Ag Sec of Argentina reported 12.99 mln mt of grain products exported in
1Q 2007. Corn exports = 1.9 mln mt

-- USDA's NASS will issue a special corn objective yield report on May 18,
2007, This report will provide information on the types of data collected
from the corn objective yield surveys. The title of the upcoming report will
be Corn Objective Yield Survey Data, 1992-2006.

-- April barley exports from Ukraine rose 20% from March.  Exports were
pegged at 713,400 mt in April vs. 593,700 mt in prior month, gov't export
data

-- Chinese Corn exports were pegged at  580,000 mt. taking year to date Corn
exports to 3.4 mmt, official customs data shows.

-- Chinese officials say 2 grain growing provinces experiencing drought,
Henan & Hebei are only 70% of their normal rainfall, Chinese state new
agency reports

-- Russian grain sowing this spring 2 mln ha behind last year's pace.  So
far 12.2 mln ha have been planted the Russian Ag ministry reports.  Rainy &
cold weather in Siberia & Volga regions are slowing the national pace

-- Dalian Corn futures lower overnight in active Sept contract.

-- Funds Monday sold 3,000 Corn.

-- eCBOT Vol: 112,308; Pit Vol.: 34,079; Open Interest change: -5,366

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

-- US April Consumer Price Index, Ex Food/Energy:  +2.3%, expected = +2.4%,
previous = +2.5%

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

Cash Markets

-- CIF Corn:  May +23 to +??, LH May +26 to +28, June +29 to +31, July +34
to +36, Aug. +36 to +40, Oct. +33 to +36.

TREND:

There is no mistaking that corn has already traded the advanced planting
report but it will be construed negative for the night. Already have
elevators backing off bids hard. Do not be surprised at a bounce back if we
roll over hard tonight?



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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