Linn Group Morning Corn Comment

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

The corn market closed 2 ¼ higher vs. the December on Friday after being as
much as 6 cents higher earlier in the session.  Corn is following the rest
of the grain complex as traders continue to see strong yields come in from
harvested areas of the US, but exports remain strong and Argentina still
having problems with getting corn planted.  Beans and wheat remain the focus
of the grain complex as corn comes along for the ride.  Traders look at
competing views as traders look at the huge harvest against the huge demand
for corn across the world.  Argentina is still having issues with getting
corn planted because some of the areas are too dry to sow corn and the areas
that are getting rain, it isn’t enough to make a big difference.  Funds were
net buyers of corn, app. 5,000+ contracts by the end of the day.  Volume was
very low with soybeans actually trading more than corn, electronically, on
Friday.

Corn was higher overnight on the back of the soybean and wheat market and
news out of China that they may curb exports the rest of the year in an
attempt to keep domestic prices lower.  The December contract closed 4 ¾
higher with beans 17 cents higher and wheat 24 cents higher.  There isn’t
much new news out on the corn market as it seems to be the follower as the
market braces for the record US corn crop.  Exports remains very strong and
domestic demand keeps getting bigger and bigger, so that is helping support
corn against the huge US crop.  Traders this morning seem more interested in
possible bean damage with the cold weather over the weekend and continued
news of weaker exports by other countries of both corn and wheat.  In
talking to traders this morning, they feel that corn will trade higher on
the back of the wheat and bean market, but there will be traders there to
sell rally’s and commercial/end users there to support it when it sells off.
The USDA should show corn 25-30% harvested when they release their weekly
crop progress report tonight.  The bottom line is that corn will have
trouble rallying with the other markets, but it will be supported on any
attempt to sell off.  Look for corn to be higher today on the opening but
struggle.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 353^6    4^6                   354^2    347^6

ZCH8                370^2    4^2                   370^6    364^4

ZCK8                381^0    4^6                   381^0    376^0

ZCN8                390^0    5^0                   390^0    384^2

Early Opening Calls: 3-5 higher

Top News

-- Freezing temps across the upper Midwest pressure soybean futures 16-17c
higher, spillover into corn this AM.

-- The Commitment of Traders report with Options as of September 11 shows
Funds:

Corn  Long  148,300  up  2,915

-- Dalian Corn futures slightly higher in overnight trade.

-- Funds Friday bought 4,000 Corn

-- eCBOT Vol: 79,083; Pit Vol.: 25,397; Open Interest change: +248

-- 6-10 Day Forecast: Above Normal Temps. Above Precip West, Below Precip
East.

-- Outside markets. Energy: crude, products lower, nat gas higher ; Gold &
Silver: higher; US $ lower vs. Euro & Yen.

Cash Markets

--CIF Corn off 1 - 5. LH Sept. +40 to +45,Oct. +50 to +54, Nov. +52 to +56,
Dec. +52 to +58, Jan. +43 to +?? J/F/M +44 to +48

TREND:

Trade is still pressing wheat hard. We broke Chi wheat 77 cents off the
highs but have not been able to put that market away over the last two days.
There will be plenty willing to take the risk of selling small rallies in
this market because of the potential of a major break in prices with huge
profitability---just not sure this is not a typical break and not really a
top. Will certainly scream if and when I do decide it is.

Corn is dashing around in 10 cent inter-day moves but will have selling on
the end of the day. The interesting reality is that trade feels there is no
longer a big risk to the top side --- and maybe not the down side either so
the options volatility is catching a lot of selling. The CZ 250 straddle
has lost 3 to 4 cents this week and will have more melt away in coming days.



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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