Linn Group Morning Corn Comment

CHICAGO - Oct 5/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower on Thursday as the market digested bigger yields
and the sell off in the wheat market.  Like a broken record, traders said
the market can't rally because of the huge US corn crop being harvested and
it won't break real big because the demand for corn remains very strong.
The volume yesterday was light and funds were net sellers of 2000+ by the
end of the day.  One of the big stories yesterday was the talk of the
excellent new genetics in the seed industry that allowed bad fields and bad
weather to have a minimal affect on yields. Of course it helps good fields
get better, but the big difference is it allows the real bad fields to
produce where in past years, these fields produced nothing.  Even though GMO
corn isn't allowed for export to most places, ethanol producers are taking
all they can get, so there demand should be there for years to come.  The
Linn Group released its grain estimate yesterday mid day at 13.44 bil bu and
157.2 bu per acre.  Overall, the weather in the next couple of day's remains
conducive for harvesting as much of the Midwest is experiencing summer like
temps.

eCBOT corn market was a little lower overnight on light trading as the
market awaits the release of the Informa crop production estimate sometime
later in the morning after the opening.  There is little to no new news so
the corn market will be looking for anything.  Talking to traders, it seems
the market is looking for Informa to release a bearish corn number and that
is part of the reason that corn sold off yesterday.  Not much new to talk
about until we get done with harvest and we see exactly how big of a crop we
have to deal with here in the US.  As one veteran trader said yesterday, if
the average yield comes in at +160 bu, that changes the whole dynamics of
the corn market as next year, analysts will program in 162-164 bu into next
years crop production estimates, raising the carryover to a much higher
level.  Talking to traders today, they feel the corn market will open
unchanged, maybe a little lower and wait for the Informa number before
selling the corn market.  Big harvest weekend so that could pressure the
corn market and wheat is the wild card.  If wheat decides to really sell
off, it will drag the corn market down with it.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 341^6    -0^4                  343^0    340^6

ZCH8                358^0    -1^0                  359^6    357^4

ZCK8                369^0    -0^6                  370^0    368^6

ZCN8                377^4    -1^2                  379^4    377^4

Early Opening Calls: 1 to 2c lower

Top News

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

-- Private analyst Linn Group estimates total US corn production at 13.430
bil bushels, with a projected yield of 157.2 bpa

-- Private analyst Linn Group estimates total US soybean production at 2.602
bil bushels, with a projected yield of 41.38 bpa

-- CONAB:  Brazilian Soybean Production pegged at 59.3 to 61.2 mil tons for
07/08 year

-- CONAB:  Brazilian Corn Production pegged at 51.8 to 52.8 mil tons for
07/08 year

-- Private analyst sees 57% of Brazil's sugarcane crop being consumed by
ethanol mills, +8% higher than the pace last year

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

-- Ceres CEO announces the development of sterile, 20 foot tall sorghum
plants to use as cellulosic ethanol feedstock - should yield between 15 and
20 tons per acre of biomass

-- eCBOT Vol: 89,290; Pit Vol.: 24,518; Open Interest change: -2,670

-- Weather: 6 to 10 day Above Normal Temps. Normal to Above Precip.

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

Cash Markets

                        Bean Barge       Corn Barge        SRW Barge
HRW Track       Ill Riv Frt

Oct                   +38/42 X           +56/58 Z           +30/ Z
+72/ Z               675

Nov                   +52/56 X           +63/65 Z           +35/ Z
+80/ Z               520

Dec                  +41/45 X           +62/64 Z           +40/ Z
+85/ Z               470

Truck                Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago            -40 X     -14 Z     -70 Z

Toledo               -50 X     -20 Z     -15 Z

Dec ILL             -35 X     -18 Z                 -16 Z
-150 Z

TREND:

Wheat market is not going to make it easy. Flat price normally will not give
so many good chances to sell it if there is a top in place. Could develop
but it is no where sure yet. Bear spreads are still the way to line up here
in Chi. Less certain in KC spreads

Corn pricing continued active today but again not chasing the market---there
on a scale down. Corn continues to be the weak leg in trade. The islands
left over all the corn contracts front to back certainly take on an ominous
look now that they have been confirmed for 3 days. Could make this market
dig

deeper than I think possible today. Demand should continue to surface here
and create new demand which will take the market down bid if it does dig
deeper.



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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