Linn Group Morning Corn Comment

CHICAGO - Jul 17/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market moved higher again on Friday as it followed beans with the
forecast for hot/dry weather later in the week.  The forecasts released
during the session were not much different from the earlier forecasts and
there was some talk of traders squaring their positions going into the
weekend.  Weather remains the only real news out in the corn market, but it
is the worst kind of news because it can change everyday, even every couple
of hours.  As one veteran grain trader has been saying the last couple of
weeks, "I hate weather markets, you can't be smart enough".  Corn is in the
middle pollination stage and weather remains critical in determining yields.
Export sales remain very strong and I would anticipate that to continue at
these prices as the rest of the world has very little other places than the
US to look at for importing corn.  Volume was moderate and funds bot app.
3,000 contracts.  Goldman Sachs released a report revising their fair value
price of corn from $3.86 to $3.10.  Traders also looking for the release of
the crop condition report on Monday after the close which is estimated to
decline 2-4%.

eCBOT was in full weather market trading mode with the grain markets opening
significantly lower on Sunday night as the hot/dry weather that was forecast
for later this week was taken out and temperatures were significantly
reduced.  Welcome to wild weather markets where if you are lucky, you can
make a lot of money, but is it worth the risk?  The corn market is still a
demand market and as we have seen the last couple of weeks with the export
sales, there is value down at these prices and you will find customers
willing to step out and buy much lower markets.  It has been tough to extend
the gains and get traders to buy higher markets, but users still need to
price corn and lower prices make that decision much easier.  Private
exporters sold 100,000 tones to unknown destinations over the weekend.
There are still some dry areas across the corn belt, but with the scorching
90/95 degree temps out of the forecast, for now, the prospect of excellent
yields is getting better and better everyday.  It should be a very ugly day
in the grain complex today as corn should open inline with last nights
close, 15 lower.  Beans will be the leader and corn should follow.  Beans
were 40 cents lower overnight, but closed 27 lower.  If the market decides
this weather forecast is for real, we could really extend the losses today.
As we have been saying all spring/summer, the higher prices and big money in
the grain markets will cause the markets to extend much higher and much
lower than normal.

Crop Scout 2007 begins today - The private crop tour without an agenda.

 eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCU7                338^2    -16^4                 348^2    335^2

ZCZ7                 351^4    -17^0                 362^2    349^0

ZCH8                365^0    -16^6                 375^4    364^4

ZCK8                375^0    -15^6                 389^6    375^0

Early Opening Calls: 8 to 9c lower

Top News

** CropScout Tour begins today!

** USDA reports private sale of 101,000 T of Corn sold to Unknown local for
07/08 delivery

-- Analyst expect slight drop in conditions for today's Crop Progress report

-- The Commitment of Traders report with Options as of July 10 shows Funds:
Corn long 164,085 up 6,943. The Supplemental report shows Index Funds: Corn
Long 361,530 up 1,007

-- Fund traded moderate Friday and mostly on the buy side. Funds bought
3,000 Corn.

-- Dalian Corn Jan futures settled lower, most of the complex also settled
lower.

-- eCBOT Vol: 121,138; Pit Vol.: 33,328; Open Interest change: +4,909

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

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

Cash Markets

--CIF Corn: July +38 to +43, Aug. +42 to +46, Sept. +43 to +45, Oct. +37 to
+40, Nov. +38 to +41, Dec. +43 to +45

TREND:

This market has already lost the enthusiasm for trading the larger corn crop
or the smaller bean crop and has turned into a full fledged weather market
hanging on each new set of maps. I mush have fielded 10 calls early in the
session today asking about changes in the forecast. It has almost turned
into the dueling weather guys? Forecasts do change with every new map put
out by NOAA. That means we will see at least 4 to 6 changes before we can
trade again on Sun night.



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/

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.