Linn Group Morning Corn Comment

CHICAGO - Oct 8/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market ended unchanged on the day after a pretty quiet day.  The
corn market is under harvest pressure and the prospect of a huge US corn
crop and it was supported by good demand and inter-commodity spreading as we
had many traders liquidating their long wheat/short corn and long
beans/short corn positions.  The corn market has been the short leg of many
inter-commodity spreads so when traders began to liquidate, they were buying
corn helping to probably prop up the price of corn that would otherwise have
been going lower.  The market was also given the Informa number during the
session, but there wasn't anything real surprising and as usual, their
production estimate had probably already been released to their biggest
customers.  The weather seemed to get better as the weekend went along as
the Midwest is going through mid-summer conditions with much of the Midwest
in the upper 80's and lower 90's.  Harvest progress will be released tonight
after the close, but these numbers will probably have little effect on the
market unless they show little progress from last week.  Volume was
light/moderate and funds were quiet, maybe net sellers of 1,000 contracts by
the end of the day.

eCBOT market was a little lower overnight on some spillover selling pressure
in the wheat market and harvest pressure.  The weather cleared for most of
the Midwest by Friday and much of the Midwest had good harvest weather over
the weekend as many farmers are very happy about getting crops harvested so
they can plant wheat.  Talking to traders last week and this morning, there
isn't really any new news out about corn and it seems to be trading off the
other markets.  Inter-commodity spreads have been a big trade and corn has
been the short leg of all these spreads.  As we saw on Friday, if traders
start to unwind these spreads, corn could be well supported even if the
fundamentals tell you that corn should be going lower.  Yield reports remain
better than expected and sowing of corn in Argentina jumped ahead over the
weekend almost 18% higher from last week and 14% higher than this time last
year.  The corn market should come under pressure today from harvest and
bearish fundamentals, but the sell off could be muted by traders buying back
their corn sell side of their inter-commodity spreads.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 339^4    -2^6                  342^4    339^2

ZCH8                356^0    -3^0                  359^0    356^0

ZCK8                367^0    -2^4                  369^0    367^0

ZCN8                376^2    -2^0                  378^0    376^0

Early Opening Calls: 2-4 lower

Top News

-- USDA Crop Progress/Conditions released at 3:00 pm CDT.

-- Argentina's corn planting progress leaps ahead, gaining +18% on last week
to 28% total; this is +14% more than last year's pace

-- Chinese NGOIC keeps the country's ag production estimates largely the
same, corn crop still seen at 149 mil tons (+2.4% from last year)

-- Russian legislature officially receives draft resolution to enact grain
export tariffs designed to keep more wheat in the domestic market, thereby
lowering inflationary pressures

-- The Commitment of Traders report with Options as of October 2 shows
Funds: Corn Long 179,646 off 14,041

-- Dalian Corn futures active May contract unchanged after trading resumes
after week long holiday

-- eCBOT Vol: 78,270; Pit Vol.: 22,426; Open Interest change: +5,631

-- Weather: Above Normal Temps. Normal to Above Precip. The Corn Belt will
see showers and thunderstorms move west to east today into Tuesday.

-- Outside markets. Energy: crude off 80c, products lower also; Gold &
Silver: lower; US $ futures markets closed.

Cash Markets

--CIF Corn steady.  Oct. +56 to +59, LH Oct. +58 to +62, Nov. +61 to +64,
Dec. +62 to +64, Jan. +49 to +52 J/F/M +49 to +52



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.