Linn Group Morning Corn Comment

CHICAGO - Oct 9/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower on Monday on the back of a limit down move in
wheat and continued harvest pressure from a huge US corn crop, but rallied
back almost 5 cents off the lows to close up near the high of the day.
Traders also are looking at the US dollar as it was stronger yesterday
making US exports a little more expensive.  Most traders are in agreement
that wheat is the leader of the grain complex pushing corn and beans down
with it.  There was some rains in the US that halted harvest late last week,
but nothing very big and harvest resumed over the weekend.  The expected
huge corn crop is weighing on the market which is already under pressure.
As expected, cash traders said they have seen steady basis levels and a
reduction in farmer selling with these lower prices.  Volume was pretty
light yesterday at just 110,000 contracts and funds were net sellers of
almost 5,000 contracts on the day.  There was no release of crop progress
yesterday because of the Columbus Day holiday so it will be released today
after the close.  Argentina corn sowing continues to be right on schedule if
not a little ahead historically.

eCBOT market was unchanged overnight after closing in the middle of the
trading range and just about the same price that the night session opened.
Volume was pretty heavy for the night session, but the December only had a 4
cent range.  Wheat continued to sell off last night down over 25 cents
during the session only to rally back and go higher, but it closed a couple
lower.  With no new news in the corn market, it will be a follower and right
now, it is going to probably follow the wheat or at least be part of the
wheat trade.  Many traders are using the corn market as the short leg of
spreads, so when you see customers selling wheat, a lot of times those same
traders are buying corn and vice versa.  Overnight, Taiwan announced it had
suspended a ban on feed corn from China, but Chinese officials said a
shortage of corn feed would limit shipments.  We had had another ethanol
plant construction that was halted because of declining margins.  I don't
think anything has changed in the corn market, it is a range trade and it
will have trouble rallying or selling off unless we get some new
information.  Corn yields continue to impress and traders are eagerly
awaiting the release of the USDA crop report on Friday morning before the
opening.  Corn will have a mixed opening and look for leadership from either
the wheat market or funds.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 339^4    -0^2                  342^0    338^2

ZCH8                356^2    0^0                   358^4    354^6

ZCK8                368^0    1^0                   368^6    365^4

ZCN8                375^2    -0^2                  377^4    374^2

Early Opening Calls: mixed

Top News

-- USDA will release Grain Export Inspections at 10:00 AM CDT, delayed a day
due to Columbus Day holiday

-- USDA will release Crop Progress/Conditions report at 3:00 PM CDT, delayed
a day due to Columbus Day holiday

-- Analyst expect no change to Chinese import quotas of Corn, Wheat, Cotton
in 2008. Corn import quota during 2007 was 7.2 mln mt.

-- Import feed corn ban temporarily lifted by Taiwan to allow Chinese feed
corn into their country to help ease price pressures.  However, Chinese
traders & analysts wonder if additional stocks are available for export.

-- Argentina Grain Exchange weekly survey shows 25% of acres have been sown
with Corn as of Friday, up 10% points from prior week, but behind the 33%
long term average

-- Argentina may be a suitable source of corn for Hungarian livestock
producers, acc. to traders

-- Dalian Corn May futures 9 Yuan/mt higher in overnight trade.

-- eCBOT Vol: 78,083; Pit Vol.: 27,328; Open Interest change: -1,877

-- Weather: Above Normal Temps. Normal to Above Precip.

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

Cash Markets

--CIF Corn steady.  Oct. +56 to +59, LH Oct. +58 to +61, Nov. +61 to +64,
Dec. +63 to +64, Jan. +49 to +51 J/F/M +49 to +52

TREND:

The corn market is getting very oversold and it showed that on the small
reversal back to close at the days highs. This is not the market to press
for the time being but sell an 11 cent rally back. The carries should
continue to widen but a lot of the gravy is gone from this trade. Full carry
in Z/H is 18 cents. Roll shorts forward this week at 17 or wider.

The wheat market is starting to act like we had expected---hard to jump on
and starting to hear talk about how oversold it is. Spreads have supported
the new crop until today when it started to get some selling along with the
front months. Use a 15 cent rally off any interim low in WH to sell the
market or be bear spread. We will add carries in this market. Z/H full carry
is 25 cents and trading today at 12 to 13. Will go to near full carry. The
N/Z8 is trading at a 15 cent carry off hard from near even money earlier
this month. This spread will continue to widen with full carry closer to 30
cents.



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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