Linn Group Morning Corn Comment

CHICAGO - Nov 16/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The market moved lower on Thursday on the back of the lower move in the
outside markets and the lack of any fresh fundamental news.  The December
contract closed down over 8 cents and near the session lows.  The outside
markets, especially, crude and the metals, helped push corn lower as both
markets were down sharply early in the day and stayed lower.  One trader
said he saw speculative selling/liquidation come in late that helped push
the market lower.  Technicians pointed to both the Dec and March falling
below their 20 day moving average which created selling pressure.  On
traders also said there was a lot of corn/wheat liquidation going on today
as well.  Volume was light to moderate and funds sold over 4,000+ contracts.
Traders await the release of the USDA weekly export sales tomorrow morning
looking for some positive fundamental news.  Very little news out about
corn, so many traders are looking more macro and watching the outside
markets.  Weather in So. America is not an issue currently, everything is
fine.

eCBOT market was higher overnight on quiet trading with the December closing
1 ¼ higher.  Traders awaited the release of the export sales overnight so
the market had little reason to move.  The USDA released export sales this
morning of 1.363 mil which was within the trade estimate of 1.2-1.5 mil.
This number is not exciting, but expected as it seems the corn weekly export
sales are always over 1 mil, week in and week out.  The soybean and wheat
export sales were very strong.  The bean number is probably already in the
market, but the wheat number was much stronger than expected.  The strong
weekly export sales will help push the grain complex higher, especially with
the stronger outside markets.  The gold market is $5 higher and crude is
$1.00 higher.  Weather remains pretty good in So. America, but some private
forecasters are looking at Argentina to dry out and possible problems into
December.  We look for corn to be higher this morning, but it will be a
follower.  Look to the other grain markets and the outside markets for
direction, along with the investment funds.  Commodities look to go higher
today and that will help the corn market move higher.  Remember, corn was
down over 8 cents yesterday, so there could be some short covering.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 376^0    1^2                   377^4    374^2

ZCH8                393^0    1^2                   394^4    391^0

ZCK8                401^6    0^0                   404^0    401^4

ZCN8                411^0    1^0                   412^2    409^4

Early Opening Calls: 2-3 higher

***USDA Corn 07/08 Export Sales Net: 1.363 mln mln mt; 08/09 Net: 300 mt;
expected 750k-1.5 mln

Top News

-- Strategie Grains:  Total EU bloc corn harvest pegged at 46.7 mil tons, an
increase of +2% from previous estimates - by comparison, 2006's harvest
totaled 53 mil tons

-- 456k mt of import Corn licenses were granted by the EU grain committee
mgmt board, year to date import licenses total 6.15 mln mt vs. 1.72 mln
granted in same period year ago

-- Barge traders talking about falling river levels and draft restrictions
that may come.

-- Dalian Corn futures fell 20 Yuan/mt to 1,757 in overnight trade

-- 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.

-- eCBOT Corn Vol: 240,421; Pit Vol.: 55,398; Open Interest change: -2,983

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

-- Outside markets: Energy crude 90c higher at $94.33/bbl; Gold $7 higher &
Silver 15c higher; US $ lower vs. Euro, unchanged vs. Yen basis the Dec
futures

Cash Markets

--CIF Corn steady up 2. Nov. +?? to +60, LH Nov. +58 to +61, Dec. +64 to
+65, Jan. +53 to +55, Feb. +53 to +55, Mar. +52 to +54, A/M +41 to +43

TREND:

The rally today in wheat may have been overblown because of all the talk of
frost in Argentina. We looked at today as a sell day in wheat. If we happen
to see further strength in wheat on Friday we look to be a seller again.
Rallies should be somewhat limited. The weakness in corn was not all that
unexpected. We may have gotten close to heavier liquidation under 3.73 ½. It
will be interesting to see if some stops are there on a lower trade
tomorrow. Breaks under 3.70, basis the Dec, should find support.



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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