Linn Group Morning Corn Comment

CHICAGO - Dec 3/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was slightly higher on Friday after wheat was able to
recover from the lows earlier in the session.  The corn market has nothing
happening fundamentally and nothing happening technically, so now more than
ever, the corn market is being swayed by outside markets.  The March
contract closed ¾ higher.  The corn market came under pressure from the
heavy deliveries and a sell off in crude oil.  The market was able to
recover after crude bounced off its lower later in the day and the wheat
market moved over 20 cents higher at one point.  Talking to traders, they
said there wasn’t a lot of news to sell of the corn market and that once the
selling was done, the market bounced back. Technically, traders pointed to
the market contract closing above the 10 and 20 day moving average as being
positive.  Traders also looking at month end and year end position squaring
by funds and possible re-allocation by funds into the new year.  Weather
remains a mixed bag as the weather in So. America is warmer, but there are
some rains forecast in Argentina that will help with soil moisture levels.
Volume was light/moderate and funds bot app. 1,000 contracts.

eCBOT market was basically unchanged overnight after trading higher most of
the night session.  The weakness in the soybeans, wheat and outside market
pushed corn lower the last hour of trading.  Very little new news out on the
corn market and December can be a very difficult month for trading the
grains.  Traders will keep an eye on the weather in So. America but still
very early in the season and traders will now focus on the fund activity and
the final crop report in January.  The corn market isn’t probably going
anywhere unless we have new news in the marketplace and that news will
probably have to come out of China.  Most traders seem to want to talk about
fund reallocation, selling wheat/beans and buying corn.  This could become a
self-fulfilling prophecy as traders try and jump into this trade before the
funds and take advantage.  One word of caution, trying to out guess funds
can be very dangerous.  The funds have more money than anybody and can move
markets or not move markets at any time to try and gain advantage.  We look
for the corn market to open lower this morning and look to the other markets
for direction.  Crude oil is lower this morning and beans and wheat should
open lower.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 382^4    -2^0                  389^4    382^4

ZCH8                401^2    -0^2                  407^2    400^0

ZCK8                411^2    -1^6                  417^0    411^0

ZCN8                419^4    -1^4                  426^0    419^4

Early Opening Calls: 1-2 lower

Top News

-- S Korea feed mill operators bought 55,000 mt of US Corn for delivery in
April

-- Poultry farm in Poland found to have H5N1 avian flu virus within a flock
of turkeys. Officials are taking appropriate steps to contain the spread of
the virus.

-- The Commitment of Traders report with Options as of November 27 shows
Funds: Corn Long 201,578 off 1,720

-- CBOT Corn Deliveries: 2777

-- Dalian Corn futures rose 6 Yuan to 1762 Yuan/mt in overnight trade.

-- eCBOT Corn Vol: 161,007; Pit Vol.: 64,648; Open Interest change: -15,759

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

-- Outside markets: Energy complex: crude at $87.97/bbl off 73c, products
lower ; Gold $1.90 higher & Silver off 8c; US $ lower vs. Euro & Yen.

Cash Markets

-- CIF Corn steady off 1. Dec. +49 to +52, LH Dec. +54 to +60,, Jan. +46 to
+48, Feb. +51 to +54, Mar. +50 to +54, A/M +40 to +44 J/J +41 to +45

TREND:

GSA this week has continued to broadcast trade ideas. Take note that by the
time the rest of the world hears these trades, they are already on the
books. Out of energy longs, out of gold longs and out of $US shorts. Sounds
a little bearish to grains on the surface---will see?

Wheat will be the death of me yet. The only major short for my hedgers with
a very large share of new crop wheat sold well before this rally
started---so deep in the hard times as far as margin calls go. Stay with the
July shorts in Chi. Hedge hard wheat in Chi. As for old crop; be short at
your own risk. There will be a day when wheat is impossible to buy?

Corn should set back a bit. I see any break under 3.90 in CH as a scaled
down pricing opportunity. Could go as deep as 3.75 but that would be a gift.



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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