Linn Group Morning Corn Comment

CHICAGO - Jun 8/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market rallied on Thursday as the market seemed to become more and
more concerned about the forecast for a ridge developing, bring hot/dry
weather into the corn belt.  Yesterday was a great example of what this
growing season is going to be like in the grain markets as the market moved
based on a forecast 11-15 days out.  The eastern corn belt remains dry as
rains continue to miss many of the dry areas.  With little to no new news,
weather remains the key to the corn market and a increase or a decrease of a
couple of bushels from the average can make a huge difference in the price
of corn and nobody wants to sell the corn market except for either very
brave or very smart traders.  The market anticipates a very big corn crop
with the estimated acres planted and any threat to those numbers will push
prices higher, very quickly.  Volume was moderate to heavy and funds were
net buyers of over 6,000 contracts.  There was some talk of frost down in
So. America hurting the corn crop, but nothing confirmed yet.  The Goldman
Roll finally arrived and pushed the spreads, but didn't bring the weakness
that many anticipated.

eCBOT market was lower overnight led by the bean market as traders took
profit after yesterday's rally and a new weather forecast came out overnight
bringing a better chance for rain into the corn belt over the next week or
so.  The change wasn't dramatic, but it seemed to take some of the wind out
of the sails of the bulls that have been predicting a ridge and hot/dry
weather.  Weather forecasts will set the tone for the grain markets as
traders look at different forecasts and debate them.  Spreads will continue
to dominate the trade and push flat price.  Interesting yesterday that even
with a 10 cent move higher, open interest didn't change much.  Cooler and
the chance for showers over the weekend will help pressure futures.  Some
traders want to talk about more money coming into the commodity markets with
the sell off in the stock market, but I don't really trust that talk.  Today
will be an interesting day as the market should open lower and look for
buying.  There will probably be some position squaring today as traders will
be hesitant to take home big positions into a weekend as the weather
forecasts seem to change every hour.  USDA crop report before the opening on
Monday with some traders thinking the surprise could be the USDA raising
yield estimates based on the excellent crop condition reports so far this
spring.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCN7                381^0    -3^6                  388^4    380^0

ZCU7                389^0    -4^4                  396^2    388^0

ZCZ7                 389^6    -3^6                  396^4    388^0

ZCH8                400^6    -3^2                  407^0    399^0

Early Opening Calls:

Top News

-- Monday is USDA Monthly Supply/Demand Report

-- Experts on GMO Corn defer authorizing 2 varieties of corn to EU
Agriculture Ministers

-- US-China Trade Deficit widens +$2.12 bil to $19.37 billion, acc to
customs data

-- US April Petroleum import prices pegged at $57.28/bbl up from the
$53.00/bbl avg price in March.

-- Dalian Corn futures lower overnight on Friday.

-- eCBOT Vol: 168,434; Pit Vol.: 83,617; Open Interest change: +7,667

-- Weather: Above Normal Temps.  Normal to Above Precip. The Corn Belt will
see scattered showers Friday

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

Cash Markets

--CIF Corn:  June +35 to +37,  July +40 to +42, LH July +44 to +46, Aug. +41
to +45, Sept. +?? to +41, Oct. +37 to +41, Nov. +37 to +42, Dec. +40 to ??

TREND:

Corn basis under severe pressure giving back a good part of the gains of
late May. Appears much of this is the reseller able to sell into this basis
strength. There does not appear to be that much fresh farmer selling.
Spreads pressed by the index fund roll but the weak cash has most traders
unwilling to even talk about spreads gaining. Starting to feel tome that the
boat is pretty heavily weighted to the bear spread side of the market again?
Look for the spreads to be the widest at next Tues-Wed. Short hedgers should
have all shorts rolled forward by then.

Flat price is impossible other than for very short term trade signals. What
is important is that the market continues to have enough momentum that
intraday signals can make the market move 7 to 10 cents. Trade it but keep
positions small. There seemed to be heavy bids under the corn market all
day---no matter what the price.



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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