Linn Group Morning Corn Comment

CHICAGO - Oct 17/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed lower on profit taking and technical selling after
the corn market moved higher the last 2 days.  Traders seemed to realize
that just because the EU will allow 3 kinds of GMO grains, it will not
increase corn exports from the US to Europe because no elevator separates
the many different varieties of GMO corn grown here in the US.  Europe could
increase the import of corn by products like distillers dried grain and corn
gluten.  The corn market also was supported by further liquidation of the
wheat/corn spreads.  Volume was light/moderate with not a lot activity after
the middle of the session.  Funds sold 2,000+ contracts by the end of the
day.  Farmer sales are still light for this time of the year as many farmers
have already sold the grain and are storing a lot on the farm.  Higher
outside markets, specifically crude oil helped corn rally back later in the
session and prevented corn from really selling off.

eCBOT market was lower overnight as the corn market continues to see some
harvest pressure as many farmers are now turning to corn as they finish with
bean harvest and getting wheat planted.  There was very little news out
overnight.  So. Korea bot 45,000 tones of non-GMO corn from the US.
Philippines announced it will hold a tender for 200,000 tones of corn before
the end of the year for January delivery.  Wet weather in western Midwest is
slowing harvest, but as Monday's progress showed, it really isn't an issue
yet.  Corn looks to be in a range trade as many traders think the USDA was
understating the US corn crop in the October report and will sell rally's.
We saw some of that yesterday when December hit technical resistance at
$3.60 area.  Corn will be well supported as exports remains very strong and
we keep hearing about lower production out of China.  We look for corn to
open lower this morning, but it is a follower, so watch the beans and maybe
wheat for direction.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 357^4    -3^0                  360^6    357^0

ZCH8                374^0    -3^2                  377^4    374^0

ZCK8                384^6    -2^6                  388^2    384^6

ZCN8                394^4    -2^2                  396^6    394^0

Early Opening Calls: 2 to 3c lower

Top News

**USDA reports private sale of 105,664 mt of US corn to Japan for 07/08

-- Export News: Philippines tendering for 200,000 mt. Corn by years end for
Jan. delivery

-- 45,000 mt of Opt origin Non-GMO corn bought by S Korea

-- Argentine corn planting progress estimated at 33.2% complete, which is an
increase of +8.2% from last week, acc. to Ag Ministry

-- ONIGC:  French corn production revised +3% higher to 13.06 mil tons, corn
carryover +18.75% to 2.28 mil tons

-- Aflatoxin confirmed in northeast Iowa and Nebraska.

-- October cattle on feed report will be released on Friday, early sample of
analysts see On-Feed at 94-97% of year ago numbers, while Marketings during
Sept were in a range of 94-98 & placement of animals on feedlots ranged at
102-112% of year ago figures.

-- Brazilian government investment bank (BNDES) expected to expand ethanol
investment by nearly $550 million - should result in 100 new production
facilities within 3 years, acc. to gov sources

-- Canadian BioEnergy's Edmonton plant will use 5% of the total rapeseed
produced in the country, acc. to the statement

-- New biodiesel refinery planned for Edmonton, Alberta, Canada - will
utilize rapeseed as a feedstock and production pegged at 60 mil gallons,
acc. to Canadian BioEnergy statement

-- Dalian Corn futures lower in overnight trade.

-- eCBOT Vol: 97,673; Pit Vol.: 24,867; Open Interest change: +1,104

-- Weather:  Normal to Below Temps. Normal to below Precip. Corn Belt will
see showers and scattered thunderstorms today into Friday.

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

Cash Markets

--CIF Corn steady off 1 . Oct. +59 to +??, Nov. +64 to +66, Dec. +64 to +66,
Jan. +54 to +55, Feb. +53 to +55, Mar. +50 to +54, A/M +40 to +43

TREND:

CZ up to first major resistance at 3.60 to 3.65. It is time to be less
positive to prices at these levels. May take a few days of sideways trade
before this market can test higher levels? Delays in harvest allowing basis
levels to take on less of a negative feel?

Wheat is a dead duck. Do not look for much rally potential here. Look for WZ
to test 7.50 quickly. Pricing will make this a choppy down side trade with
small selling opportunities.



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.