Linn Group Morning Corn Comment

CHICAGO - Nov 2/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market sold off on Thursday on the back of lower outside markets,
weaker export sales and technical selling.  Commodities seemed to built up
over the last couple of days and the market took profit today.  Corn was
higher overnight because of higher outside markets and a weaker dollar, but
by the time the corn reopened, crude and gold were lower on the day and
dollar was rallying to session highs.  For the first time in I don't know
how many weeks, weekly export sales were lower than expected and with no
other news, it made a difference.  Corn was also led lower by spillover
selling from the wheat market as it traded limit down off and on late in the
session.  Cash traders also said they saw some pick up in farmer selling
with the higher futures prices and firming basis levels.  Option trade was
very active with the trade being supportive of December futures with put
selling and call buying and bearish March futures with a lot of call
selling.  Weather was negative corn for both the US and So. America.  Funds
were net sellers of 5,000 contracts.  Israel was a buyer of 60,000 tones of
US corn and Taiwan is going to re-tender up to 29,000 tones on Friday
morning and another 35-60,000 tones next Tuesday

eCBOT market was higher overnight with a brief rebound from the sell off
yesterday as the crude oil also rallied overnight. There is very little new
news out about corn overnight.  On the export front, Taiwan did buy 23,000
of US corn yesterday and private exporters reported to the U.S. Department
of Agriculture export sales of 235,000 metric tons of corn for delivery to
South Korea during the 2007/2008 marketing year.  The 2007/2008 marketing
year for corn began September 1.  It is very interesting that So. Korea
keeps coming back to the US for corn instead of getting its corn from China.
FC Stone pegged the 2007-08 U.S. corn crop at 13.240 billion bushels on
Thursday and the soybean crop at 2.651 billion bushels.  FC Stone estimated
corn yield at 153.8 bushels per acre and soybean yield at 42.2 bushels per
acre.  This news was released after the close and shouldn't have a big
effect on the market today.  Informa is set to release their production
estimate later this morning.  Corn is still a range trade and will look to
outside markets for direction.  The only kicker today could be fund trade
from the expect roll by Deutsche Bank index fund from Dec07 to Dec08

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 371^2    2^4                   372^0    368^2

ZCH8                388^4    2^4                   388^6    385^6

ZCK8                398^4    2^6                   398^4    395^0

ZCN8                407^4    2^6                   407^4    404^0

Early Opening Calls: 2 to 3c higher

Top News

-- USDA reports private sale of 235,000 mt of Corn sold to S Korea for
delivery in 07/08

-- EU officials have granted licenses for the import of 457k tons of corn
this week

-- South Korea Friday bought 110,000 mt. US Corn for Feb. delivery

-- Taiwan tendering for 23,000 mt. US Corn and 12,000 Soybeans for Dec

-- Taiwan purchased 23k tons of corn and 12k tons of soybeans from the US at
tender, acc. to traders

-- FC Stove Nov production estimates US Corn production at 13.240 bil.bu.
vs. September estimate Of 13.445

-- US Farm Bill debate continues in the Senate - Majority Leader quoted as
saying it may be done within a week, but other legislature may compete for
time

-- Dalian Corn futures 8 Yuan/mt higher basis the May contract.

-- eCBOT Corn Vol: 117,125; Pit Vol.: 46,806; Open Interest change: -1,030

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Below
Precip.

-- Outside markets. Energy: Crude 25c higher at 93.73/bbl, product higher
also ; Gold $4.00 higher & Silver: slightly higher; US $ mixed, lower vs.
Euro, slightly higher vs. Yen.

Cash Markets

--CIF Corn steady.  Nov. +55 to +58, Lh Nov. +57 to +60, Dec. +59 to +61,
Jan. +49 to +52, Feb. +49 to +52, Mar. +49 to +52, A/M +40 to +43

TREND:

Corn looks more vulnerable to a break again after the trade today. Initial
support at 3.60 but look for a test of 3.50. The turn in the markets today
coincided with cycle timing.



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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