Linn Group Morning Corn Comment

CHICAGO - Jul 11/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market moved higher on Tuesday on the back of the gains in the
soybeans and the talk of hot/dry weather moving back into the Midwest later
next week.  The December contract closed almost 7 cents higher, just off its
highs.  The long term forecast moved a ridge back in to the Midwest in the
July 20-24th time frame which is right in the middle of pollination.  This
forecast is up for debate as some forecasters completely disagree with the
ridge coming back in the picture and some have different interpretations of
the ridge and where it is going to be located exactly.  The bottom line is
that current weather is very conducive for crop development but the huge
demand for corn by the world means that any weather scare no matter how
small, especially during pollination, is going to rally corn.  Even if the
Midwest remains dry, the cool weather over the next week should not cause
any damage.  Traders also said the reduction in the crop condition helped
support corn prices.  Volume was moderate with the funds buying over 6,000
contracts by the end of the day with the market

eCBOT market closed slightly lower overnight on a pretty quiet session after
the rally yesterday.  The December contract was ¾ lower as we continued to
see beans rally higher on the possibility of hot/dry weather in a week or
so.  Traders will keep an eye on the USDA monthly supply/demand report that
is released tomorrow before the opening, but it should have a minimal affect
on the corn and more important for the wheat.  Traders this morning expect a
little lower opening with some profit taking after the rally yesterday.
Different traders feel the corn crop is made and all we are looking at is
how big can the yield be with almost near perfect growing conditions.  There
will still be your bulls that will want to talk about a hot/dry ridge coming
into the Midwest next week, but I think we will have to see more agreement
among the weather forecasters or actual heat before the market will take off
to the upside.   Taiwan was into the US buying corn overnight, 16,000 tones.
I would look for more 2 sided trading in the corn market as it will follow
beans if that market goes higher, but I wouldn’t buy a higher corn market.
Traders will be very carefully watching the weather forecasts, but I think
we will have to see actual heat and corn crop damage to chase out the
shorts.  Remember, commitment of traders showed big spec shorts in the corn
market, so any big rally on weather could be exaggerated as traders
liquidate their positions.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCN7                335^4    -2^4                  338^0    335^4

ZCU7                344^2    -1^2                  346^0    342^2

ZCZ7                 356^2    -0^6                  358^0    354^2

ZCH8                371^0    0^0                   371^4    368^4

Early Opening Calls: steady to 2c lower

Top News

-- Export News: Marubeni has finalized sale to Taiwan SugarCorp for 29,000
tons of US corn and 16,000 tons of US soybeans, according to traders.

-- Dalian Corn futures lower overnight.

-- Fund trade mixed Monday. Funds  sold 4,500 Corn, Wheat 1,000. Even Oil.
Bought 2,500 Soybeans, 1,000 Meal.

-- eCBOT Vol: 196,146; Pit Vol.: 55,099; Open Interest change: +3,248

-- 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; Gold & Silver: higher; US $ lower
vs. Euro & Yen.

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:

We wanted to take off longs bot earlier this week in the rally today.
Suspect we will get a better chance to buy the markets again.



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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