Linn Group Morning Corn Comment

CHICAGO - Sep 18/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed higher on Monday on the back of the rally in wheat
and beans in the face of continued harvest pressure.  The December wheat
contract closed 29 cents higher after being limit up earlier in the session
and beans closed almost 14 cents higher. Corn harvest remains right on
schedule and yields continue to be better than expected as traders now think
the USDA will raise it trade estimate in the next crop report.  With the
harvest moving along at a brisk pace, there is a lot of farmer selling which
is helping keep a limit on any gains.  Weather remains warm and dry here in
the US which is conducive to harvest.  Volume was pretty light and funds
were buyers of 3,000+ contracts on the day.  Export inspections were below
the estimate, but as last week showed, more could be added later in the
week.

eCBOT corn was a mixed bag overnight, opening a little lower before rallying
up near unchanged on the back of the strength in the wheat market.  There is
little to new news out in corn except for harvest news so as we have been
saying, corn will be a follower and right now, wheat and beans continue to
move higher.  The USDA crop condition report showed corn good/excellent
increased 2% but it will have very little affect on the market.  Harvest
progress increased 6% to 14% which was on the low end of the estimate of
15-20%, but as one trader said this morning, the 14% is probably too low and
we will see a big jump next week.  Not much in any of these numbers that
will affect corn very much.  I feel like a broken record, but corn is a
follower in the grain complex right now behind wheat and beans.  The wheat
market remains very volatile and when it breaks, it will break hard and
probably drag everything down with it.  The huge US corn crop will continue
to weigh on corn prices in the front months with the back months staying
strong because with the high wheat and bean prices, corn will be competing
for acres next year.  Corn planting in Argentina remains on schedule and
traders will keep an eye on it because it is very important to prices that
they get the extra acres planted.  Market should open mixed today and should
move along with wheat which could be very volatile.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 352^0    -0^2                  353^6    349^4

ZCH8                368^6    -0^2                  370^4    366^6

ZCK8                379^4    -0^2                  380^4    378^0

ZCN8                388^0    -0^4                  389^4    387^2

Early Opening Calls: steady/lower

Top News

*Federal Reserve interest rate decision expected just after 1:15 pm CDT.

**S Korea buys 55,000 mt of US Corn in a tender that ended Tuesday

-- CME to launch options on Ethanol futures on eCBOT platform Oct 5, will
also offer clearing on cash-settled options and on ethanol calendar swaps.

-- Corn Dented: 96% latest; prior week 90%; 5 yr avg 90%

-- Corn Mature: 64% latest; prior week 42%; 5 yr avg 46%

-- Corn Mature: 14% latest; prior week 8%; 5 yr avg 9%

-- Corn Conditions: Good to Excellent: 63% latest vs. prior week of 61%.

-- Monday USDA Corn Export Inspections, Sept 17th:  30.856 mil bu, expected
= 33-43 mil bu, previous = 43.958 mil bu

-- Dalian Corn futures mixed.  Jan futures 1 Yuan lower; active May 1 Yuan
higher

-- eCBOT Vol: 68,693; Pit Vol.: 16,238; Open Interest change: +3,791

-- Weather: Above Normal Temps. Above Normal Precip. The Corn Belt will see
light scattered showers move west to east today into Thursday.

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

Cash Markets

--CIF Corn off  1 - 5. LH Sept. +38 to +42,Oct. +50 to +52, Nov. +52 to +58,
Dec. +52 to +59, Jan. +43 to +?? J/F/M +45 to +48

TREND:

Short covering in wheat led the trade today. Not sure the new demand
deserves the rally until someone buys something. Soft red basis firming but
hard wheat still showing signs of congestion in capacity. Lot of guys in the
west still wanting to move cash to make space for corn and beans finding
basis bids spongy. Capacity is just already committed. ABARE will issue
production estimates during the night. Might remind everyone that they are a
long in the market and like to influence the bullish trend in the market
place

Corn flat prices still fighting an expanding harvest and active farmer
selling. Domestic basis levels in the east are much firmer than those in the
west. Starting to see more weakness in DDG values in the west as well. The
trend is starting to develop a more positive feel. Range of 3.40 to 3.60
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/

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.