Linn Group Morning Corn Comment

CHICAGO - Aug 20/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

Overall market volatility across all the markets seemed to be at the
forefront of Friday's action with the grain complex following along with the
other market.  Very little news out in the corn market, but the Fed lower
the discount rate, it seemed to spur buying in the commodity market and both
beans and corn closed higher and wheat we able to get up to unchanged by the
end of the day.  Nothing has changed in the corn market as the hot weather
in the southern belt is hurting yields, but much of the northern areas are
getting good, timely rains helping some of the drier areas.  The rain will
help support the beans more than the corn, but it is still looked at as
positive.  The sweet corn crop looks to be very good here in the northern
areas and as one veteran trader said this morning, that is usually an
indication of the regular corn crop.  The demand side of the corn market
remains very strong and basis levels firmed last week on the break in
futures prices.  Volume was light to moderate and the funds bot 8,000
contracts by the end of the day.

eCBOT market was pretty quiet overnight on light volume.  The December
contract opened on its lows, and remained jumpy for the next hour, only to
recover to close just slightly lower by the close this morning. There isn't
any real new news out in the corn market this morning as this is usually a
slow time in the corn markets, especially here in the US.  The rain received
by the northern/central corn belt is probably too late to do much in terms
of improving yield, but these rains will pressure beans and corn will
follow.  Most traders see the corn market in a stalemate with the
commercial/users buying corn on breaks and producer/spec selling on rallies.
We will have the crop condition report released today after the close and
different traders are interested to see what the USDA has to say because of
the surprise unchanged numbers last week. Different traders expect to see
much lower numbers for the southern states, but they aren't sure we will see
that much improvement in the northern areas where the rain won't help as
much as the heat is hurting in the southern areas.  Estimate seems to be
unchanged to 1% lower in good/excellent.  The corn market is following the
other grain markets and really won't do much on its own.  Expect light
action in the corn market today as traders await the crop condition report
release after the close.  Corn should open mixed to lower and I wouldn't be
surprised if it went lower today with beans and wheat both called 3-5 lower.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCU7                328^4    0^0                  328^4    324^4

ZCZ7                 345^2    -0^4                  345^4    341^0

ZCH8                360^0    0^0                  360^0    356^4

ZCK8                367^4    -1^6                  369^2    367^4

ZCN8                378^0    -0^6                  378^0    374^4

Early Opening Calls: mixed

Top News

-- CropScout.com yield tour has begun.  Crop scouts Monday will be
canvassing Nebraska, Indiana, Ohio, and Illinois.

-- USDA weekly crop conditions & progress report released at 3 pm CT Monday.
Analysts expect unchanged to slightly improved conditions for soybeans.

-- Ukraine Ag ministry see harvest at 22.84 mln mt through Aug 17.  Avg
grain yield 2.06 mt/ha.

-- eCBOT Vol: 122,445; Pit Vol.: 38,133; Open Interest change: +3,172

-- Outside markets. Energy: crude 65c lower, products lower ; Gold 50c lower
& Silver 12c higher ; US $ lower vs. Euro, higher vs. Yen.

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

Aug      +20/30 X          +58/60 U             +0/+10 U         +62/ U
575

Sep      +22/32 X          +61/68 U             +10/20  U        +65/ U
650

Oct/No  +40/45 X          +55/58 Z             +30/  Z            +63/ Z
650

Truck    Beans   Corn     Wheat               Meal Hi-pro        Oil

Chicago            -60 X    +2 U    -60 U

Toledo   -62 X    +10 U  -15 U

Dec ILL -37 U   +0 U                           -9 U                  -275 U

TREND:

One more time the market has found demand surfacing under the lower closes.
Heavy commercial buying was very evident in soyoil, beans, and corn.

The corn spreads have tightened very slightly this week-fade it, there is no
reason for this. Flat price has limited upside. Look for the market to run
into problems on this rally --- but in reality all we did was expand the
range to 3.30 to 3.60. No breakdown here either



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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