Linn Group Morning Corn Comment

CHICAGO - Nov 6/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

December corn futures closed lower on Monday on light consolidation trade
and a weaker crude oil market.  Crude oil was lower early in the day but
then rallied higher only to finish down almost $1.50 at the end of the day.
Corn opened lower but was able to recover as soybeans and wheat came back
right after the opening and traded higher most of the day.  Technically,
corn traded an inside day within Friday's trading range and found little
reason to rally as it got up toward break even.  Besides the weaker crude
market, there was light wheat/corn spreading that helped to keep a lid on
any attempt to rally corn.  The corn market did see stronger near-term
demand with the USDA announcing Egypt and So. Korea were in buying US corn.
Import inspections were 56.724 mil bu. which was well above analyst
estimates of 35.0 to 40.0 mil bu.  Volume was light and funds were net
buyers of maybe 1,000 contracts on the day.  The demand for ethanol is
picking up as many refiners are starting to blend more than ethanol.  An
increase for ethanol will help support the corn market.  Traders looking
forward to the USDA crop production report that will be released on Friday.

eCBOT market was higher overnight as it seems the outside markets are once
again selling the US$ and buying the commodity markets.  The December
contract closed almost 4 cents higher  overnight as the outside market
rallied and the USDA showed harvest was almost completed at 86% and with
excellent weather last weekend, it should be almost completely done by next
weeks report.  In the western belt where harvest had been lagging, IA and NE
both made big strides and are now actually ahead of last year.  The USDA
crop progress report showed, 86% harvested vs. 79% last year and 80% 5yr
average.  On the outside markets, crude was up almost $2 overnight and gold
was up another $10 which help lend support to the corn market.  With harvest
wrapping up, that will take off some pressure off the corn market and could
point to higher corn.  Beans are the leader of the grain complex and will
help give direction to the other grain markets.  Look for corn to open
higher today, but it should have trouble rallying unless the investment
funds are in the grain markets to support it.  Weather remains decent for
So. America and conducive for growing.

USDA releases weekly export sales on Thursday morning and the November Crop
Report on Friday morning. Both reports are released before the opening.

The CME Group announced that the mini-grain contracts will now trade
electronically side-by-side during the day with the trading pit which offers
an excellent tool for small traders and hedgers.  The CME Group will have
market makers in these markets to help support these markets.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 379^0    3^6                   379^4    374^2

ZCH8                396^2    3^6                   396^4    391^4

ZCK8                406^0    3^2                   406^0    401^6

ZCN8                415^4    3^2                   416^0    411^2

Early Opening Calls: 3-4 higher

Top News

-- 40,100 mt of US Corn bought by Taiwan in overnight tender, acc. to
traders

-- Corn harvest in latest week rose to 86% complete vs. the year ago 79%
pace & 5 yr avg pace of 80% complete.

-- Monday's Corn Export Inspections: 56.724 mln mt; expected 37.5 mln mt

-- Friday is USDA's Crop Production & World Ag Supply/Demand report.

-- CBOT Nov Ethanol Delivery: 1 contract

-- Dalian Corn futures finished 10 Yuan/mt higher to 1763 Yuan/mt on volume
of 816,994 contracts traded basis the May futures

-- eCBOT Corn Vol: 129,033; Pit Vol.: 33,574; Open Interest change: +797

-- Weather: 6-10 Day Forecast: Above Normal Temps. Normal to Above Precip.
The Corn Belt looks dry today and Wednesday.

-- Outside markets. Energy: Dec crude +$2.26/bbl to $96.21/bbl, setting new
high at 96.44 in morning electronic session, products follow suit ; Gold
$12.30 higher & Silver: up 37c to $15.16; US $ lower vs. Euro, slightly
higher vs. Yen basis Dec futures.

Cash Markets

--CIF Corn up 1 to 2. Nov. +58 to +60, LH Nov. +60 to +62, Dec. +63 to +64,
Jan. +51 to +52, Feb. +50 to +53, Mar. +50 to +52, A/M +40 to +43

TREND:

Basis levels continue to firm for corn all around the market. Domestic
industrial and feed users appear to lead the gains. This is typical post
harvest activity but it is adding a positive element to the flat price as
well. Market appears well supported on small breaks. There is not enough
short in the market to create much excitement on "good" trades. Not sure
where this leaves the market. Overbot and due a correction but do not feel
it will be deep? US corn continues to compete well with all alternative
sources or alternative feedstuffs. The world seems bent on growing more meat
protein for consumers so feed interest remains very strong in China and
other areas?

Wheat spreads started to scare the short on Fri and continued to wash a few
out today. The index fund bear spreading expected got a little more active
late setting the spreads back on their ear a little. Look for the KC/Chi
spreads to continue to show promise. Fade the gains in the Chi spreads that
showed today.



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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