Linn Group Morning Corn Comment

CHICAGO - Aug 15/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn sold off on Tuesday on the back of the decline in the soybean
market and the forecast for more favorable weather.  Traders are still
worried about the hot/dry weather in the southern corn belt, but with the
wetter forecast for the northern and central corn belt, it seems to have
slipped to the back of their minds.  Weather this time of the summer is much
more important for beans than corn, but it will help fill kernels for corn.
Obviously, with the wetter forecast, soybeans were lower by over 15 cents
yesterday and that helped pull corn lower.  Remember, corn is the laggard of
the grain complex and will follow the other markets.  With wheat 20-25 cents
higher and commercial buying, corn was able to close 4 cents off the lows
and in the middle of the days range.  Corn also came under pressure from the
USDA crop condition report released after the close on Monday that was
unchanged from the week before when the market was expecting a decline in
conditions from 1-3% good/excellent.  Volume was light/moderate and funds
were net sellers of 5,000+ contracts.

eCBOT market was higher overnight after yesterday’s sell off with the
December contract closing 2 ½ higher.  There really wasn’t any new news out
overnight, but corn did have a pretty good range overnight, 7 cents, and
closed up towards the high.  Overnight, Argentine corn growers association
announced a new estimate for 2007/2008 corn plantings up 12% from last year,
but this is down from the 20% estimate last month.  The reason given for the
decrease was the lack of seed and the cost of fertilizer and some traders
suspect we could hear the same things affecting Brazil as well.  This may be
part of the reason we saw corn jump up a little overnight.  Remember, many
users are holding off on buying corn for next year in anticipation of bigger
corn acres planted in So. America.  Traders will watch the weather for corn,
but most feel the corn crop is made and now everybody is arguing over not if
the crop is big, but how big is the crop.  Weather remains bearish beans and
corn will have a hard time trading higher and will follow beans.  Corn
opened lower overnight and rallied back along with the other markets to
close a little higher.  Talking to traders, they think the weather is
getting more bearish for beans, and corn should follow.

 eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCU7                330^2    2^6                   331^0    324^4

ZCZ7                 347^2    2^2                   348^0    341^6

ZCH8                363^4    3^0                   363^4    358^0

ZCK8                372^6    1^6                   372^6    369^4

Early Opening Calls: 2 to 3c higher

Top News

-- Corn grower group in Argentina suggest their members would likely set
aside 12% more acreage toward corn in 2007/08, they previously estimated 20%
rise in acres planted, their current lower estimate is because of dry
conditions & ag supply shortages

-- Dalian Corn futures were mixed, nearbys higher and 08 contracts mostly
lower

-- eCBOT Vol: 154,369; Pit Vol.: 37,226; Open Interest change: -3,756

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

-- Outside markets. Energy complex crude 50c higher; products higher; Gold
down 3.60 & Silver 30c lower; US $ higher vs. Euro, lower vs. Yen

Cash Markets

--CIF Corn  firm up 2. Aug. +58 to +59, Sept. +59 to +??, Oct. +51 to
+53,Nov. +52 to +54, Dec. +53 to +57, Jan. +38 to +41

TREND:

Dec corn still stuck in this trading range between 3.40 and 3.60. But it
looks like it is getting ready to trade below 3.40 and set up a test of
3.25.

A new high close for wheat. Magnet at 7.50 still in place. The action in the
stochastics implies that this rally may be in throes of a blow-off type
trade. The wheat option pit has been inundated in small call selling and
small put buying for the last 50 cents. Suspect we are not done, until we
spank those call sellers. The question will be, does it take 7.50 or 8.00?



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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