Linn Group Morning Corn Comment

CHICAGO - Dec 4/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly higher but well off the highs made earlier
in the session on the back of corn/wheat and corn/bean spreading.  The March
contract closed up 2 cents after being up almost 10 cents earlier in the
session.  Traders pointed to the spreading, good export inspections, and
fund reallocation as the reasons for corn to rally in the face of sell offs
in the beans and the wheat.  There was very little news out on the corn
market so traders seemed to come up with reasons for the rally.  The sell
off after the early gains was technical according to some traders, while
other pointed to profit taking.  There jus didn't seem any reason for the
corn market to extend and find buyers on a higher market.  Weekly export
inspections were 55.618, above expectation of 52-55 mil and above last weeks
inspections of 53.121.  Traders also talked about possible fund reallocation
out of beans and wheat and into corn.  Today we may have seen some traders
trying to position themselves for this anticipated fund reallocation.  Funds
bot 4,000+ contracts on the day.  So. Korea announced the purchase of 55,000
tones of US corn, further evidence that there is no corn coming out of
China.

eCBOT market was higher overnight on continued to move higher after giving
up most of the gains yesterday.  Traders pointed to excellent demand,
continued fund re-allocation, and talk out of Argentina that there may be
some frost damage to the newly planted corn crop.  Worldwide demand for corn
remains excellent as it seems like So. Korea is coming to the US corn almost
daily.  Mexico bot 545,000+ tones of US corn for 07/08 and 08/09.  We have
speculated that the most important part of this story is that they are
coming to the US instead China, maybe telling the world they know something
about China's corn situation.  We also continue to hear talk from traders
that index funds and other investment funds will be re-allocating money out
of beans and wheat and into corn.  We saw some of this price action
yesterday, but it is difficult to tell if this was action fund re-allocation
or just traders trying to jump on a trade idea.  Argentina remains a major
competitor of the US for corn exports so weather there remains very
important and now there are rumors that the newly planted may have been
damaged by frost.  We look for the corn market to open higher today and look
to try and go higher.  There seems to be positive news around the market and
it will try and push the March corn up toward the highs.  The March contract
has traded up to the top of the range and failed, so that should be key.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 389^2    3^2                   389^2    385^4

ZCH8                406^2    2^6                   407^0    403^4

ZCK8                417^2    3^2                   417^2    413^6

ZCN8                425^4    2^4                   426^0    422^0

Early Opening Calls: 2-3 better

Top News

*USDA reports private sale of 545,084 mt of US Corn sold to Mexico for 07/08
& 08/09

-- December 11th is the date set by China's gov't to sell state reserve Corn
into the domestic market in a bid to lower food prices & tame inflation,
acc. to Chinese Nat'l Development committee

-- Dalian Corn futures May Corn futures fell 2 Yuan in overnight trade to
1760 y/mt, Sept futures were 1 higher at 1838 y/mt

-- eCBOT Corn Vol: 162,377; Pit Vol.: 53,341; Open Interest change: +5,432

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Above
Precip. Most of the Corn belt will be dry today except for some light snow
in the far north. Dry Wednesday.

-- Outside markets. Energy -.31 at 89$; Gold & Silver: +8.6 at 797$ & +.25
at 14.26$ ; US $ lower vs. Yen, Sharply lower vs. Euro

Cash Markets

-- CIF Corn steady off 1. Dec. +31 to +33, LH Dec. +34 to +39,, Jan. +44 to
+47, Feb. +51 to +54, Mar. +50 to +54, A/M

+40 to +44 J/J +41 to +45



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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