Linn Group Morning Corn Comment

CHICAGO - Nov 7/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market traded higher today on the back of the crude market and the
other outside markets.  The December contract closed 10 ½ higher which was
almost 3%.  Technicians look at this as important close as corn approaches
the highs from late September.  Traders said funds were big buyers, over
10,000+ contracts and there was a lot of bullish option activity.  The
outside markets, especially crude and a lower US$, are directly affecting
the corn market with little to no new fundamental news.  Much of the
movement in the grain markets is inflationary buying and investment funds.
Many traders are waiting for the release of all the fundamental data later
in the week on Thursday and Friday morning.

eCBOT market was higher overnight as we saw the energies and metals take off
higher again and it dragged the grain markets higher.  As one astute analyst
said this morning, it seems like the movie Groundhog Day because every night
the outside markets go higher and pull the grains with them.  Very little
news out on the grain markets as many traders look to square positions in
front of the USDA report on Friday morning before the opening.  Overnight,
Argentina announced they were raising export taxes on corn, wheat and beans
in an effort for the government to raise more revenues.  The tax on corn
will go from 20% to 25%.  Even with the increased taxes, corn registries
still remain closed to export even though they have opened bean and wheat
export registries.  Turkey reportedly tendered for 150,000 tones of corn
that should come from the US and maybe Argentina.  News out of China
overnight has them banning foreign controlling interest in soybean and
rapeseed crushers and bio-fuel plants.  Starting to hear from different
analysts about China having to become an importer of corn sooner rather than
later.  Credit Suisse released a report saying that China will have to start
importing corn to meet its domestic demands and may go the way of soybeans
years ago, making them a corn importer for years to come and not a one time
occurrence.  If this happens in the next 2 months or the next 2 years,
nobody knows.  We do know from past experience that China will not come into
the export market before they know how much grain they have this year and
they feel a bottom is in the market.  Expect corn to open higher this
morning, but probably not as strong as the overnight closes.  It should be
hard to extend recent gains without outside markets going higher, investment
funds, or surprise news.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 389^6    4^0                   393^0    385^0

ZCH8                406^6    3^6                   409^6    402^0

ZCK8                417^6    4^6                   419^0    412^0

ZCN8                425^4    3^4                   428^0    421^0

Early Opening Calls: 2 to 3c higher

Top News

-- 164,000 mt of Wheat bought Wednesday by Turkey, they also bought 150,000
mt Corn

-- Private analyst Linn Group estimates national corn production at 13.266
bil bushels on a yield of 154.1 bpa, while national soybean production at
2.592 bil bushels on a yield of 41.26 bpa. The group estimates Iowa corn
yields at 176 bpa, soybean yields at 51 bpa. Illinois corn yields at 178
bpa, soybean yields at 46 bpa & Nebraska corn yields at 170 bpa, soybean
yields at 51 bpa.

-- Starting Nov 9th, CME Group mini-size grain futures will trade from 6:30
p.m. to 6 a.m. and 9:30 a.m. to 1:45 p.m. Central time Sunday through
Friday.

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

-- Survey of analysts expect US Corn production in Friday's USDA report at
13.261 Bln down slightly from October's 13.318 & ending stocks of Corn 1.932
Bln bu.

-- Dalian Corn futures 10 Yuan/mt higher basis the May futures.

-- eCBOT Corn Vol: 189,428; Pit Vol.: 53,492; Open Interest change: +22,427

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

-- Outside markets. Energy: crude $1.06 higher at $97.77/bbl, hits high
overnight at $98.62; Gold $17.00 higher & Silver 29c higher ; US $ sharply
lower vs. Euro & Yen.

Cash Markets

--CIF Corn off 1 to 2. Nov. +57 to +58, LH Nov. +59 to +60, Dec. +61 to +62,
Jan. +50 to +51, Feb. +50 to +53, Mar. +50 to +52, A/M +40 to +43

TREND:

Rally in futures caused a marked increase in farmer selling. Corn split
spot, JFM, and new crop in equal portions. Movement came in all parts of the
Corn Belt. Bean movement increased but was not any thing close to corn
trade. This has caused corn basis to relax slightly today.

Wheat rallied but the spreads continue to show KC gaining on Chi and the
bear spreads worked in spite of a rally. This is a correction in a bear
market in our opinion. Chicago up into major resistance at the close.



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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