Linn Group Morning Corn Comment

CHICAGO - Nov 15/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn was higher on Wednesday on the back of other markets, renewed
demand, and technical buying.  The December contract closed 8 ¼ higher as
outside markets helped push it higher.  The grain markets were led higher by
the bean and meal market as both made fresh highs.  Outside markets were
much stronger today and a weaker dollar helped pull corn higher.
Technically, the December contract was push and support the corn market as
the December contract traded above Tuesday’s high and the 10 day moving
average.  Traders continue to watch, long term, the battle for acres with
soybeans in 2008 and it looks like the corn acres are going to be smaller
than traders estimated a month ago.  Overnight Tuesday, the USDA announced
US corn sales to Japan and Egypt which showed the market that maybe the
demand hasn’t gone anywhere and the world is still looking to buy US corn.
Weekly sales are going to be released Friday morning instead of tomorrow
because of the holiday Monday.  Volume was moderate and funds were net
buyers of close to 9,000 contracts.  Option traders said volume was very
heavy as traders liquidated positions as the December contracts expire next
Tuesday.

eCBOT market was lower overnight as traders seemed to take profits in the
grain markets after the recent run up and the outside markets were lower.
Weekly export sales will be released tomorrow because of the holiday on
Monday.  All the news today seems to be coming out of China about the
soybean and soybean oil market, but it is affecting all the grain markets.
Remember, China is the 800 lb gorilla in the grain markets, so all the grain
markets are paying attention to what they do and say.  There is some more
talk about opening CRP acres as there has been some request for information
about the number of acres available and when certain acres are coming due.
Some traders feel the gov’t needs to open acres or we will have to ration
demand as production will fall short.  An article out this morning from
Bloomberg talks about commodity funds and how they are outperforming the
other markets and how some of the biggest pension plans are getting
involved.  This will only help money coming into commodity funds.  Corn
should open a little lower today, but new sales of soybeans to China this
morning will help support the grain markets.  The bottom line is that corn
is being pulled two ways.  On one side, the corn market is digesting a huge
corn crop and on the other side, the demand for corn remains very active,
eating up the huge US crop.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 380^0    -3^0                  383^4    379^0

ZCH8                396^0    -4^0                  400^4    396^0

ZCK8                406^4    -3^0                  410^0    406^4

ZCN8                415^0    -3^0                  418^6    415^0

Early Opening Calls: 2-3 lower

Top News

-- USDA weekly Thursday Export Sales data release, delayed until Friday Nov
16th, due to Veteran's Day holiday on Monday.

-- USGC:  Indonesian corn imports to drop dramatically in current marketing
year, as much as -60% to only 600-700k tons of corn total, largely due to
higher domestic production of the grain

-- France grain stats office raised its 2007 Corn output figure by 1.1 mln
mt to 14.16 mln mt from October's forecast of 13.06 mln mt

-- Reluctance of US officials to embrace Brazilian ethanol imports has
curbed investment in ethanol storage facilities in the US by Brazilian
companies, acc. to industry sources

-- Conventional blending in ethanol jumped nearly +7% this week over last to
2.119 mil bbl/day, acc. to the EIA.  Conventional blending is the best
indicator of discretionary, or non-mandated, blending of ethanol into the
nation's gasoline supply.  This caps off the strongest 4 week period of
discretionary blending on record, +6.8% higher than the previous four weeks
(which was also the previous record).  The increase reflects the price
differential between gasoline and ethanol, and the potential for this spread
to increase demand

-- Analyst expect Nov 1 cattle on feed to be 98% of year ago, however,
placements on feed lots during October were expected to be 110% of year ago
placements.

-- UK poultry cull expands to 4 neighboring farms as authorities attempt to
halt highly infections H5N1 bird flu virus

-- Dalian Corn May futures were down 3 Yuan/mt to 1780 Yuan/mt in overnight
trade.

-- eCBOT Corn Vol: 128,830; Pit Vol.: 35,789; Open Interest change: +1,393

-- Weather: 6-10 Day Forecast: Below Normal Temps. Above Normal Precip. The
Corn Belt will be dry today into Saturday.

-- Outside markets. Energy: 27c lower at $93.83/bbl, products lower ; Gold
$15 lower & Silver: 49c lower; US $ slightly higher vs. Euro, slightly lower
vs. Euro.

Cash Markets

--CIF Corn steady off 1. Nov. +?? to +60, LH Nov. +58 to +60, Dec. +62 to
+64, Jan. +52 to +53, Feb. +52 to +54, Mar. +51 to +54, A/M +41 to +43

TREND:

I have tended to concentrate on reasons why this market might be risky at
maintaining long positions over the last two to three days. They are myriad
in the economics of a weak dollar that could bounce, energy markets that are
over cooked and grains that have been tugged along with speculation. This
feeling has not changed in spite of further rallies in beans, meal and oil.



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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