Linn Group Morning Corn Comment

CHICAGO - Sep 19/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed unchanged on Tuesday after the market sold off
earlier in the session.  The December contract sold off almost 8 cents only
to rebound 10 cents and then close off the highs.  Traders said nothing has
changed in the corn market as huge exports are competing with a huge US
crop.  Any rally will be sold by traders because of the huge US crop and any
break will be supported by commercial accounts.  Cash traders said that
basis levels will be under pressure, especially in the heart of the Midwest
because of harvest pressure.  Traders expect the USDA to raise its crop
expectations with its next report which is weighing on corn futures.  We are
still hearing talk out of China that they are going to limit their exports
to help domestic prices, but nothing official, and as we have learned in the
past, it is sometimes difficult to believe the information coming out of
China.  Volume was light/moderate yesterday and funds were net sellers of
only 1,000 by the end of the session.

eCBOT market was a little lower overnight on the back of the sell off in
wheat.  There was very little new information out overnight except Taiwan
tendering for 35,000 mt of US corn and India announcing its wheat's stocks
are good and they should be covered for the next 10-12 months.  Wheat is the
leader of the grain complex and corn should follow.  Traders starting to
look at wheat in a negative light after yesterday's positive news unable to
rally the market and the news out of India this morning.  There is a lot of
traders that are long wheat and short corn, so if they decide to flee that
trade, it could help support corn.  Corn is in the middle of harvest and
will feel the pressure from farmer selling, but exports remain strong and
commercials seem to be there every time there is a break.  We expect the
corn market to open lower and it will probably take its lead from the wheat
market.  A big sell off in the wheat market will drag the rest of the grain
complex with it, but probably not nearly as bad.  The price difference in
wheat to corn is so huge wheat could break $1-$2 and corn could break 20-30
cents.  Many traders we have talked to today think we could see a very down
day in wheat today, so corn will follow.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 350^0    -2^2                  353^6    350^0

ZCH8                367^4    -1^4                  370^4    367^0

ZCK8                378^0    -1^0                  380^0    378^0

ZCN8                386^4    -2^0                  389^6    386^4

Early Opening Calls: 2 to 3c lower

Top News

-- Taiwan tendering for 35,000 mt. US Corn and 10,000 Soybeans for Oct/Nov.

-- India is soon largely expected to double their required ethanol blend in
domestic gasoline from 5% to 10% - this increase is expected to be met
domestically and will come from the country's primary ethanol feedstock of
sugarcane, acc. to gov sources

-- AIG Analyst:  "Several billion more" dollars headed into commodity funds;
2Q 2007 commodity index investment pegged at $120 billion

-- S Africa Net Yellow Corn Imports: 14,173 mt through Sept 14.  Imports
pegged at 16,739, while exports 2,566 mt through Sept 14

-- S Africa Net White Corn Imports: 7,154 mt through Sept 14

-- Fed's FOMC lowers Fed Funds Target Rate 50 bps to 4.75% from 5.25%

-- Fed's FOMC lowers Discount Target Rate 50 bps to 5.75% from 6.25%

-- The Brazilian real rose to 1.8730 after the Fed cuts rates, up 13.9% for
2007.

-- Dalian Corn futures lower in overnight trade

-- eCBOT Vol: 104,485; Pit Vol.: 24,818; Open Interest change: +3,875

-- Weather: Above Normal Temps. Above Normal Precip. The Corn Belt may see
some isolated light showers today.

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

Cash Markets

--CIF Corn up 1 to 3. LH Sept. +42 to +48,Oct. +51 to +54, Nov. +53 to +58,
Dec. +53 to +60, Jan. +43 to +?? J/F/M +45 to +48



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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