Linn Group Morning Corn Comment

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

The corn market on Friday closed lower at the end of the day after the
weather forecast took the possibility of a ridge out, their was some cash
movement, and the funds are rolling their positions out of the July
contract.  Traders also said that the market had a technical setback after
corn reached new highs on Thursday, as this is historically a difficult time
of the year for corn to rally.  Cash traders said that even though there was
some farmer movement, the basis remains very strong.  Funds were active
buying corn early in the session, but ended up net sellers by the end of the
day.  Because it was the 1st of the month, traders said there was a fresh
round of money coming into the market and that helped corn go higher early
in the session, but rolling of positions out of July helped push it lower.
Export sales on Friday also helped support the market, but not enough to
keep corn higher.  Volume was moderate to heavy.  Weather remains much of
the focus for the corn market as we have different weather forecasters
changing their mind, it seems every hour, on whether or not there is going
to be a ridge forming in 11-15 day model.

eCBOT market closed slightly lower overnight after being 3 higher in the
early part of the session.  Traders this morning looking for more of the
same that we saw on Friday as it will be difficult to rally corn this time
of the year and traders are looking for a 2 sided trade.  The USDA will
release their crop condition report after the close today and the consensus
seems to be either a 1-3 point higher or lower move from the 78%
good/excellent rating from last week.  Anything different will probably be
viewed as a surprise.  Traders this morning think that spread trade will
still dominate as we have a lot of funds rolling out of the July contract
into December and September.  The Commitment of Traders report on Friday
showed funds short the front month corn and the commercials are long, so we
could see some positive movement in the N/Z spread.  July corn still looks
to be a range trade and until corn breaks out to one side or the other, I
would still treat corn as a range trade.  The July is at the top of that
range and I would look for it to come under pressure up here, but it will
find support 10-15 cents lower.  Traders this morning think we will see a
two sided trade today and corn having trouble rallying from its current
level.  Funds could be the great difference maker if the they get involved.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCN7                386^0    -0^6                  390^0    384^0

ZCU7                388^0    -1^2                  392^4    386^4

ZCZ7                 383^0    0^0                   388^0    380^0

ZCH8                394^6    1^2                   396^6    391^4

Early Opening Calls: mixed, 1-2 lower

Top News

-- Chinese stock futures were lower on further concerns government will try
other methods to slow the runaway bull market. Shanghai was down 8.25% in
Monday's trade.

-- Dalian Corn futures benchmark Sep unchanged; rest of complex lower

-- eCBOT Vol: 145,296; Pit Vol.: 54,736; Open Interest change: +4,732

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

-- Outside markets. Energy: crude lower, products mixed; US $ lower vs. Euro
& Yen; Gold & Silver lower

Cash Markets

-- CIF Corn: May +47 to +49, June +44 to +47,  July +45 to +49, Aug. +47 to
+??,  Sept. +41 to +44,Oct. +37 to +40, Nov. +37 to +40

TREND:

Trying to fade the rally in wheat as harvest will eventually expand and the
market will take on less of a positive feel. Still think that a large part
of the rally is being driven by world situation and that also will feel
different in several weeks as the EU harvest gets under way.

Corn certainly held better this week than one might have expected---beware
of being too bearish. Buy 10 to 15 cent breaks here.



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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