Linn Group Morning Corn Comment

CHICAGO - Jul 10/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed mostly lower on Monday as traders looked at the
cool/wet forecast for the next week or so across most of the corn belt which
is bearish for corn prices.  This forecast is weighing on prices, but the
rally in beans help hold prices up.  Most of the Midwest was hot/dry last
weekend, but the weather quickly changes to cooler temps and scattered rain
showers with pretty good coverage.  Volume was moderate/light and funds were
net sellers of almost 5,000 contracts.  Traders were also awaiting the
release of the crop condition report after the close which was expected to
show a 1-2% decline in good/excellent ratings.  Corn is entering its key
pollination and reproduction stage which can make or break yields depending
on weather which is why corn prices can be very volatile.  The current
forecast is consistent with the opportunity for excellent yields and that
will hold down any attempt to rally corn.  Export activity was very light
over the weekend with inspections lower than expectations.  Cash traders
report pretty steady bids with a little farmer selling.

eCBOT market closed about unchanged after rallying back from the lows
overnight on a weather forecast for a ridge building back in the Midwest in
about 10 days.  It is still amazing to see the bulls try and push the corn
market higher on the littlest piece of news.  Other forecasters this morning
are in disagreement about the building ridge and remember, this is a
forecast 10-15 days out.  Not always the most accurate.  The crop condition
report released after the close showed corn 3% lower in the good/excellent
category which was a little friendly as the consensus was a 1-2% decline.
Whisper number was a 3-4% decline so I don't think this will have much
affect on the corn market.  I would look for current weather conditions to
weigh on corn prices, but the possibility of a ridge building later in the
month will help keep traders on edge.  Commitment of Traders report released
on Monday afternoon showed large speculators greatly reducing their long
positions and adding short positions.  Index funds actually added positions.
Remember, if there is a weather scare and corn rally's, it could be that
much higher if the market is caught short.  I would look for the market to
try and go lower today but corn is not the leader, so keep your eye on the
beans and wheat.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCN7                328^2    -4^2                  329^2    327^2

ZCU7                339^4    0^2                   339^4    334^2

ZCZ7                 349^6    -0^4                  350^2    345^0

ZCH8                363^6    0^0                   363^6    359^0

Early Opening Calls: mixed

Top News

Corn Progress & Conditions Mini-Recap

Corn % Silking:  32%; 13% week ago; 21% yr ago week; 18% 5 yr avg.

Corn Crop Conditions Latest: VP= 3; P= 6; F= 21; G= 51; EX= 19

Corn Crop Conditions Prior Wk: VP= 2; P= 5; F= 20; G= 53; EX= 20

Corn Crop Conditions Yr Ago Wk: VP= 3; P= 8; F= 26; G= 47; EX= 16

==========================================================

-- Corn price rise due to biofuel momentum are not the reason why general
food prices are rising, rather global grain stocks & weather were attributed
by Amer. Farm Bureau economist for recent gains.

-- Russian ag ministry says grain harvest totals through July 9 at 11 mln
mt, up from 7.2 mln mt harvested in same week yr ago.

-- CME & CBOT shareholders announced that preliminary results indicate the
shareholders of both companies have approved the proposed merger of CME and
CBOT Holdings, based on a review of the proxies voted at Monday's special
meetings

-- Dalian Corn futures lower overnight.

-- July Corn Deliveries: 896

-- eCBOT Vol: 137,034; Pit Vol.: 39,253; Open Interest change: +13,584

-- Fund trade mixed Monday. Funds sold 4,500 Corn

-- Weather: Normal to Below Temps. Normal to below Precip. The Corn Belt
will see showers and thunderstorms today and Wednesday

-- Outside markets. Energy complex lower, nat gas higher; Gold & Silver:
slightly higher; US $ lower vs. both Yen & Euro

Cash Markets

--CIF Corn:  July +46 to +48, Aug. +47 to +50, Sept. +45 to +49, Oct. +40 to
+42,  Nov. +41 to +45, Dec. +45 to +48

TREND:

Wheat took a back seat again today with small speculative selling in KC
along with harvest time hedge pressure in both KC and Chi. No reason to
expect any strength here but export trade could make a difference. Stay
tuned.

Corn will most likely try to rally some overnight. Not sure we are too
successful. Tended to try to replace corn sold out last week on weakness
today. Still have scaled up selling in CZ 370 calls for farmer pricing
enhancements. The market seems to be trying to develop a range trade that
will correct the oversold condition of last week? Look for bigger trade if
last weeks lows or highs come out?



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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