Linn Group Morning Corn Comment

CHICAGO - Oct 3/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The grain markets unraveled yesterday with the wheat leading the markets
lower and the fund selling wasn’t just limited to the grain markets as we
some metals and energies all trading lower.  The day started with technical
problems on the grain floor delaying the opening one hour and pushing almost
all the trade to the eCBOT platform and not the pit.  Some traders said this
delay added to the selling pressure.  The first couple of months in the corn
market closed down 20 cents or limit down on the back of a stronger dollar
and a huge US corn crop.  A stronger dollar at this point in the year could
limit exports right when the US is harvesting a record large corn crop.
Traders also said the weight of a very large harvest in both the corn and
the beans finally pushed the market lower, especially after the rally those
market saw over the last week or so.  The reports from ethanol companies
that profits are lagging also weighed on corn prices as many of the
expansion plans for these companies are now on hold.  Harvest will continue
in earnest later this week as much of the rain will move out of the Midwest
and temps remain above to much above normal creating that much more farmer
selling and pressure on the corn market.

eCBOT market continued lower overnight down another 6 cents before
recovering late in the session with the December closing 2 ½ lower.  Today
will be a very interesting day as we see if the corn market finds support or
if it continues its sell off after yesterdays limit down move.  The wheat
market traded limit down again overnight before recovering some to close 22
cents lower.  The corn market is facing heavy harvest pressure as harvest
picks up after stalling for a couple of days with rain across most of the
Midwest.  There was a lot of negative news for the corn to digest yesterday
including the rally in the US dollar so today we will see how well the
market bounces back or if we continue to see liquidation.  Many traders have
been waiting to sell the corn market and there is very little reason for it
to rally, but the demand for corn remains strong and that should help
support the market.  Talking to traders this morning, the wheat will be the
leader of the grain complex again today and the funds will be the wild card.
The corn market should have pretty good user support on a lower market, but
huge fund selling could make that buying insignificant.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 346^2    -2^4                  347^6    343^4

ZCH8                363^4    -2^0                  364^4    360^2

ZCK8                372^0    -3^0                  374^4    370^2

ZCN8                382^4    -1^4                  383^4    379^6

Early Opening Calls: 3-5 lower

Top News

-- 80,000 mt of Russian Wheat bought by Egypt's GASC Tuesday. 30,000 mt
Russian wheat from Egyptian based traders at 2,149 Egypt pounds/mt, while
25,000 mt of wheat purchased from Friends & 25,000 mt bought from Alex
Grains

-- Stats Canada numbers on Thursday eagerly awaited by wheat traders;
average total production estimates are between 19.6 and 20.5 mil tons

-- Thursday Census Bureau soyoil stocks, analysts expect 3.01 bln lbs.

-- Thursday Informa will release updated corn & soybean production numbers.

-- Senate Ag Committee will work out markup details on the upcoming US Farm
Bill on Wednesday, acc. to gov sources

-- USDA-sponsored Renewable Energy Conference WIREC to be held in DC on
March 4-6 of 2008

-- 87% of oilseed & grains have been harvested by Saskatchewan farmers in
latest province ag report for the week ending Sept 30, but slightly ahead of
the 79% 5 yr avg harvest pace

-- Mexican Ag Ministry assures traders no significant damage was done to
corn/coffee/sugar crops by Hurricane Lorenzo; full production still
anticipated

-- eCBOT Vol: 151,510; Pit Vol.: 43,538; Open Interest change: -6,532

-- Weather: Above Normal Temps. Normal to Above Precip. Showers and
thunderstorms will end in the eastern Corn Belt today.

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

Cash Markets

--CIF Corn up 1 to 5. Oct. +58 to +61, Nov. +64 to +65, Dec. +62 to +63,
Jan. +50 to +51 J/F/M +50 to +51

TREND:

Wow---wheat has been the upside leader---should be the down side leader if
the top is in. If this is to be, chances to sell the market tomorrow will be
very limited. Sharply lower to start and locked limit down again quickly
would be the sign confirming a top is in with a steeper break to come.

Bear spreads are still the way to line up here in Chi. Less certain in KC
spreads

Corn pricing was very active today and will be active again at 3.45 and 3.40
given the chance. Users should extend coverage into the spring and summer of
next year.



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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