Linn Group Morning Corn Comment

CHICAGO - Dec 5/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market moved to 5 month highs on Tuesday on the back of great
demand, speculative buying, technical strength, and the expansion of the US
energy bill which would boost ethanol production.  The March contract closed
7 ¾ higher, but off the highs.  The corn market was able to push through
recent highs which brought about technical buying and helped corn find
strength outside of the latest range trade.  Traders also pointed to
excellent export demand, especially with the announcement that Mexico bot
500,00+ tones of US corn.  Volume was moderate/heavy and the March contract
traded to its highest levels since the end of June.  There was also some
talk of China releasing grain from their reserves into the domestic markets
to tame inflation, but this talk has been the market the last couple of
days.  Corn seems to be experiencing a tri-fecta right now, but as export
demand remains excellent, there is year-end rebalancing, and positive
technical indicators.  So. Korea continues to buy US corn as they have bot
1.5 mil tones since November.  There is increased optimism that the new
energy bill would possibly mandate the use of ethanol for blending which
would create more demand for US corn domestically.  Weather remains a
concern in So. America as the world is now dependent on them for a good crop
because of the increased demand.

eCBOT market was higher overnight on a tight trading range with the March
contract closing 1 higher.  Trading volume was pretty light and traders are
think we may see some follow technical buying after yesterday’s trade moved
into new highs.  The US$ is making new highs overnight, but crude oil is
higher, so the grain markets will be fighting to help/hurt the grain markets
today.  Demand remains excellent and traders will be expecting good export
sales figures tomorrow morning after bigger than expected weekly inspections
released on Monday.  Argentina got some rain of the last couple of days
which will help crop development, but they will need more rain and the
current forecast doesn’t have significant rain fall for the next 7 days.
The Chinese said it will sell corn reserves into domestic markets next
Tuesday which should help keep a lid on domestic prices.  Technicians point
to yesterday’s trade as providing bullish momentum, now we will see if corn
has any follow through.  The market should open a little higher this morning
and look for direction from the bean market and the crude market.  The crude
market is currently higher, but they get their stocks data right on the
grain opening, so keep an eye on that market.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 394^4    0^4                   394^4    392^0

ZCH8                412^2    1^0                   412^6    410^0

ZCK8                423^0    1^2                   423^0    420^4

ZCN8                431^0    0^6                   431^2    428^2

Early Opening Calls: 1 to 2 higher

Top News

-- Chinese grain stats office kept its 2007 Corn production at 148 mln mt
unchanged from its November estimate, analysts had expected the estimate in
a range of 140 -145 mln mt.

-- S African Grain Stats office weekly data shows 3.857 mln mt of White Corn
delivered off farms for week ending Nov 30

-- S African Grain Stats office weekly data show 2.138 mln mt of Yellow Corn
delivered off farms for week ending Nov 30

-- Dalian May Corn futures were 1 Yuan higher to 1761 Yuan/mt, Sept rose 3
Yuan to 1841 Yuan/mt in overnight trade

-- eCBOT Corn Vol: 183,523; Pit Vol.: 42,760; Open Interest change: +18,289

-- Outside markets. Energy up 1.40 at $89.75; Gold & Silver: up 1.40 at $802
& up .90 at $14; US $ up slightly vs. Yen & up sharply vs. Euro

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

Dec      +40/42 F           +30/34 H             +25/30 H         +70/75 Z
390

Jan       +51/53 F           +44/46 H              +45/55 H        +78/80 H
400

Feb       +40/42 H           +50/53 H              +55/60 H        +80/85 H
425

Truck                Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago                       -25 F     -4 H     -35 H

Toledo              -48 F     -14 H   -20 H

Dec ILL            -20 F     -6 H                  -9 Z                 -225
Z

TREND:

My new crop wheat shorts are starting to bite. But ten days ago when the
market broke into new highs, I felt the risk was manageable and did not
cover the shorts. Still feel the same, although the manageable part is
starting to get away from me. The leaders in this market could very easily
turn out to be corn and soybean meal. The formations in these two markets
are flashing warning signs of larger rallies in the making. Counts in March
corn are 4.21 and than 4.60. Both of these trades could point to a test of
5.25 to 5.50, all-time highs. Meal projections are still looking at 312.00
to 320.00. But like corn, could end up trading considerably higher



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/

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.