Linn Group Morning Corn Comment

CHICAGO - Nov 1/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market ended up higher today on the back of a surprise move in the
crude oil market and 30+ year highs in bean oil.  December closed up over 5
cents but 5 cents off the highs as the grain markets saw a late round of
profit taking.  Demand for corn remains strong as traders look forward to
the release of the USDA weekly export report and there is very little news
out to affect the corn market.  Corn is still in a range trade and is
heavily affected by the outside markets.  Cash traders said there is very
little farmer selling and firm basis levels which will add support to the
corn market.  Volume was moderate/light but funds were net buyers of 7,000+
contracts at the end of the session.  Corn is following the outside markets
and is dependent on outside investment dollars to keep going higher.

eCBOT market was higher overnight after the profit taking sell off we saw at
the end of the trading session yesterday.  Outside markets were higher
overnight with Dec crude trading over $96 which helped to support and push
corn to higher prices.  Export sales this morning were a little
disappointing at 635,000 vs. the estimate of 900,000 to 1.2 mil.  Weekly
export sales have been much higher in past weeks, but I don't know how much
these numbers will affect the market today as everybody knows exports are
going to remain strong.  Traders starting to hear some talk of lower corn
yields in some of the wet areas this summer.  This is just talk, but FC
Stone will be releasing their crop production estimate tonight and Informa
will release their estimate tomorrow morning.  USDA will release the
November crop production estimate next Friday, November 9th.  With the huge
demand for corn both domestically and in exports, a lower crop estimate by
the USDA could be the push that corn needs to go higher out of the trading
range.  Corn should open unchanged/slightly higher today but it will look to
the outside markets for direction.  Crude is selling off and lower on the
day after being up almost $2 last night.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 378^6    3^2                   379^4    375^2

ZCH8                396^2    3^4                   396^2    392^0

ZCK8                403^6    2^4                   404^4    401^0

ZCN8                414^4    3^4                   414^4    409^4

Early Opening Calls: unchanged, 1 higher

Top News

**USDA Corn 07/08 Export Sales Net: 635,300 mt; 08/09 Net: none mt; expected
900k-1.2 mln

-- Israeli group buys 60,000 mt of US Corn to be delivered between Feb &
Mar.

-- Agroconsult: Fertilizer demand may exceed supply in Brazil, despite
record deliveries of 25.5 mil tons

-- Domestic analysts are forecasting the potential for a record corn crop
for Argentina; up +5% to +10% from last year to around 23-24 mil tons

-- Taiwan to tender for 60k tons of soybeans, North/South American origin
Thursday

-- Poultry from Chile may soon be in US grocery stores; the USDA will allow
the import of the meat from Chile beginning in early December, and plants
will be regularly inspected to insure compliance with US regulations

-- White House officials says Pres. Bush to nominate Ed Schafer as USDA Ag
Secretary.  Mr Schafer previously held the North Dakota Governor position

-- Thursday FOMC lowers Fed Funds rate 25 bps to 4.50% from 4.75%, they also
lowered Discount rate 25 bps to 5.00% from 5.25%

-- Dalian Corn futures 11 Yuan/mt higher at 1717 Yuan/mt as 587k contracts
traded.

-- eCBOT Corn Vol: 120,800; Pit Vol.: 34,135; Open Interest change: +14,442

-- Weather: 6-10 Day Forecast: Below Normal Temps. Normal to Below Precip.
The Corn Belt looks dry today into Sunday.

-- Outside markets. Energy: crude new all time high again at $96.24/bbl in
electronic session, products higher too ; Gold & Silver: both lower; US $
shows strength against Euro, slightly higher vs. Yen basis the Dec futures.

Cash Markets

--CIF Corn off 1 - 3. Nov. +55 to +56, Lh Nov. +57 to +58, Dec. +59 to +61,
Jan. +49 to +51, Feb. +49 to +52, Mar. +49 to +52, A/M +40 to +43

TREND:

The wheat market continues to have big demand around. Other origins have
been trying to protect domestic food prices and this does not change.
Depending on how this plays out, could see another round of biz for the US
down the road? This appears to be the support in wheat on weakness. Dry
conditions in hard wheat areas is also supportive---but to Chi?

Corn tries to break out of the trading range. Appears intent on trading over
3.90 to test $4.00 again.



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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