Linn Group Morning Corn Comment

CHICAGO - Nov 14/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed lower on Tuesday as we saw a steep sell off in the
crude oil market and a marginal sell off in the metals.  The December
contract closed down over 4 cents while the December crude oil closed over
$3.00 lower after being over $4 lower earlier in the session.  Over the last
couple of months, corn has been really tied to the crude oil market, even
more so than it has been the last year or so because of ethanol.  Informa
released their 2008 acreage estimate at 88 mil acres vs. their last estimate
of 85.8 mil acres.  Even though they are really just making an educated
guess, it was still considered negative to the corn market.  Soybeans were
stronger on the day and that helped support corn along with the demand for
corn from everybody (ethanol, feed, exports) remains very good.  Volume was
light to moderate and funds sold around 4,000 contracts by the end of the
session.  USDA announced 53.2 mil bu of US corn were inspected this week,
above the estimate of 45-50 mil bu.  Talk out of Brazil exporting 11 mmt of
corn this year after the USDA estimated exports at 8 mil.

The eCBOT market was higher overnight as we saw a recovery in the outside
markets and the continued rally in the bean market.  The outside markets
stopped their recent slide with gold up over $10 and crude up over $1.00
overnight.  The corn market has seemed to follow the outside markets the
last couple of weeks as there has been little to no fresh fundamental news.
The December contract closed 2 ½ higher overnight on decent volume.  Traders
said some of the rally in corn was based on Informa reducing corn acres in
2008 which might have some validity after talking to farmers in the main
corn belt.  The bottom line is that we won’t have a good fix on corn acres
until late next spring, but everybody can speculate.  The USDA released its
crop progress report yesterday after the close and it showed corn 94%
harvested vs. 86% a week ago vs. 89% 5yr average.  With corn harvest pretty
much completed, there is very little fundamental news to move the corn
market so traders will look for direction from other markets and weather in
So. America will become very important.  The weather in So. America remains
excellent for crop development and continued plantings.  Beans remain strong
and will help support corn, but the general consensus is that it will be
tough to pull corn into new highs.  Indonesia announced that it will lower
its corn imports this year by about half from 2006 as domestic output was
higher.  Chinese domestic corn prices remain high even during harvest as
farmers are reluctant to sell.  We look for corn to be higher this morning
on sympathy of higher gold/crude/bean markets and the USDA announcements
overnight of US corn sales to Egypt and Japan.  See below for details.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 377^2    2^4                   378^4    373^6

ZCH8                394^2    2^2                   395^2    390^6

ZCK8                405^0    2^6                   405^2    401^0

ZCN8                413^0    2^4                   413^6    409^2

Early Opening Calls: 1-3 higher

Top News

*USDA reports private sale of 106,680 mt of US Corn to Japan for 2007/08

*USDA reports private sale of 180,000 mt of US Corn to Egypt for 2007/08

-- Private analyst Informa:  2008 Corn acreage pegged at 88.9 mil acres, 3.1
mil acres more than previous estimates, 4.7 mil acres less than '07

-- Latest USDA data shows 94% of the Corn crop has been harvested up 8%
points from prior week & ahead of last year & 5 yr average pace of 89%
complete.

-- Tuesday's USDA Soybeans Export Inspections: 24.927 mln mt; expected 26.0
mln mt

-- Tuesday's USDA Corn Export Inspections: 53.249 mln mt; expected 47.5 mln
mt

-- Tuesday's USDA Wheat Export Inspections: 23.138 mln mt; expected 30.5 mln
mt

-- eCBOT Corn Vol: 136,759; Pit Vol.: 51,066; Open Interest change: -1,492

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

-- Outside markets. Energy: crude up 1.30 at $92.47/bbl, products up too;
Gold & Silver both shoot higher up $17/oz & 44c/oz respectively; US $ lower
vs. Euro, higher vs. Yen.

Cash Markets

--CIF Corn steady off 1. Nov. +58 to +60, LH Nov. +59 to +62, Dec. +62 to
+64, Jan. +51 to +53, Feb. +51 to +53, Mar. +50 to +53, A/M +41 to +43

TREND:

Energy is certainly showing signs of a correction in the making. The grain
markets have tended to react to this.

Corn is also following the pattern. Dec 08 was not able to break out of the
wide trading range and if the pattern continues should give a chance to
cover shorts at 3.90 to 4.00. This would coincide with a break in spot corn
to 3.65 to 3.70.



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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