Linn Group Morning Corn Comment

CHICAGO - Aug 21/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed higher on Monday after rallying off the lows on very
little volume and some technical buying.  Traders said the corn market ran
out of selling late in the day and that was the reason for the rally as much
as the buying.  US corn futures remain in demand by the world and exports
are continued to be very brisk.  One trader speculated that corn has moved
out of the weather phase here in the US as much of the corn belt received
rains over the weekend which is considered bearish, but corn futures still
rallied.  This isn't unexpected as rain can't do much for corn this time of
the year, but it is really the first time corn has rallied into beneficial
weather.  There was some flooding across the northern corn belt and will
cause some damage, but it was pretty localized and shouldn't have a huge
influence on overall yields.

eCBOT market closed unchanged overnight on very light trade and a small
trading range.  The crop condition report was 2% higher good/excellent from
last week which was about what expected from traders, but beans were 2%
worse than the prior week which was a little unexpected and helped push
beans higher overnight and probably helping keep corn up.  The crop
condition report was really a non-event, especially this time of the year,
and traders will probably move on to the next piece of news.  Export
activity remains strong and traders will not look toward the weekly export
sales on Thursday before the opening.  This time of year there is usually
very little news out about corn hence probably very little volatile price
movement.  The corn market is a follower this time of the year and will
probably go higher with beans, but there isn't any big reason for corn to
rally.  Some big rains across the northern corn belt could prove to be a
problem, but we still don't think it will have a huge affect on the overall
yield.  It should be a pretty quiet day, unless the funds get involved.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCU7                331^6    0^0                   332^2    329^6

ZCZ7                 348^6    0^0                   349^0    346^6

ZCH8                364^0    0^0                   364^0    362^2

ZCK8                372^0    -0^4                  372^4    371^6

Early Opening Calls:  mixed, slightly higher

Top News

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

Corn Progress & Conditions Mini-Recap

Corn % Dough:  81%; 66% week ago; 79% yr ago week; 70% 5 yr avg.

Corn % Dented:  43%; 24% week ago; 40% yr ago week; 31% 5 yr avg.

Corn % Mature:  6%; NA% week ago; 6% yr ago week; 5% 5 yr avg.

Corn Crop Conditions Latest: VP= 6; P= 12; F= 24; G= 42; EX= 16

Corn Crop Conditions Prior Wk: VP= 6; P= 12; F= 26; G= 41; EX= 15

Corn Crop Conditions Yr Ago Wk: VP= 7; P= 11; F= 24; G= 41; EX= 17

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

-- CropScout.com: Scouts move into Iowa, Ohio, & Nebraska Tuesday.  Over
1,000 yield tour images in Illinois already posted at www.CropScout.com!

-- Arkansas State Univ researchers look to enzymes in corn germ to help
break down cellulosic feedstocks for ethanol production, according to a
researcher participating in the study.

-- 23-29,000 mt of US corn sought by Taiwan Sugar Corp in Wednesday tender
for shipment between Sep 22-Oct from US Gulf coast and Oct 7-21 from the PNW
acc. to traders

-- 28-35,000 mt of corn gluten & 12-18,000 mt of DDG tendered by group in
Israel on Monday

-- Monday's USDA Corn Inspections:  38.644 mln bu.; expected 34-43 mln bu,
previous = 42.635 mil bu

-- Chinese central bank rose 1 yr lending rates to 7.02.% beginning
Wednesday, & the 1 yr deposit rate was also raised to 3.6%.  This is the 4th
interest rate rise for that country since March of this year in an effort to
curb further inflation

-- Dalian Corn futures higher in overnight trade.

-- eCBOT Vol: 80,608; Pit Vol.: 20,526; Open Interest change: -10,428

-- Weather: Normal to Above Temps East, Normal to Below West. Normal to
Below Precip East, Normal to below West.

-- Outside markets: Energy complex: crude 36c lower, products slightly
lower; Gold 80c higher & Silver 1c; US $ lower vs. Euro & Yen

Cash Markets

--CIF Corn  firm up 2. Aug. +60 to +66 Sept. +64 to +??, Oct. +55 to
+??,Nov. +56 to +??

TREND:

The markets have tended to "coil" over the last 3 days trading within the
range of the sharply lower trade last Thur. The trade today may have been an
effort to break out of this cooling pattern? If confirmed with higher trade
tomorrow, could be an important trade. Consumptive buying interest has been
developing on the lower prices. Farmer selling has been very sporadic and
tied to precip at first. All of a sudden, farmers are not so sure that rain
makes grain any more.

One more time the market has found demand surfacing under the lower closes.
Heavy commercial buying was very evident in soy meal and corn. Assume this
is tied to the feed grain demand in Europe. They will not be buyers of US
corn but will clean up other feed alternatives forcing those not so
concerned about GMO back to US corn.

Wheat continues to be the market safe to fade on breaks. The 7.50 magnet is
still in place.



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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