Linn Group Morning Corn Comment

CHICAGO - Dec 7/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly higher after seeing selling early in the
session on really consolidation trade and disappointing export sales.  Corn
has underlying support and was able to recover from early weakness,
especially after the crude market rallied to close $2.74 higher.  Export
sales were 1.059 mil vs. the estimate of 1.1 to 1.5 mil.  Some traders said
they were disappointing, but it was still a strong sales number.  Traders
are also starting to look toward Argentina to see if they are getting any
rain.  Argentina is the #2 exporter of corn behind the US and they are
experiencing dry weather.  It is still very early, but the size of the So.
American crop will determine how big of a price war we have between corn and
beans for acres.  The funds were about even on the day as the corn market
saw light/moderate volume.  There is very little news out on the corn
market, so corn will look to the outside markets, especially the crude oil
and wheat markets.  Traders will also look to any export sales overnight for
positive direction.

eCBOT market was higher overnight continuing the rally that started later in
the session on Thursday.  There wasn't a lot of news out overnight, but
exports are lending support with South Korea seeking 220,000 tones of
non-GMO optional-origin corn.  As the Europeans have found out, it is
getting increasing difficult to find non-GMO grains, even out of So.
America. Traders are looking for a decline in U.S. 2007/08 ending corn
stocks ahead of Tuesday's USDA supply/demand report.  This should be
supportive of the corn market.  China is selling corn and wheat into the
domestic Chinese market in an attempt to tame food-led inflation, a bullish
factor for U.S. corn futures.  This move by China to sell corn into the
domestic market has been widely anticipated and it finally happened last
night with China selling 500,000 tones into their domestic market.  This
will be considered bullish by traders.  We look for the corn market to open
higher this morning and then look for direction.  All the grain markets were
higher overnight, but the energy markets are lower.  A much higher (5-10)
corn market today will probably be met with some selling as the market still
isn't ready to buy strength, but the funds are always the wild card.  This
week, corn seems to have found its trend for the rest of the day around
11-11:30 in the morning and carried through to the close.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 396^4    1^6                   397^0    394^4

ZCH8                414^4    2^4                   415^0    411^6

ZCK8                424^6    2^2                   425^2    422^2

ZCN8                432^2    1^4                   433^0    430^2

Early Opening Calls: 2-3 higher

Top News

-- 220,000 mt of Non GMO Corn sought in S Korea tender for Mar & April
delivery, acc. to those familiar with grain trade

-- Dec 11 is date set for China to sell 500,000 mt of Corn from its state
reserves in a bid to lower domestic price inflation potential, acc. to the
Chinese government's Nat'l Grain & Oil trade center

-- Harvest of Ukraine grains in 2007 expected at 29 mln mt down from 34.25
mln mt in 2006, acc. to ag official in the Ukraine

-- Dalian May Corn futures settled 11 Yuan lower to 1735 Yuan/mt in
overnight trade, other contract months were 4 to 12 Yuan lower also

-- eCBOT Corn Vol: 94,008; Pit Vol.: 27,391; Open Interest change: +5,908

-- Outside markets. Energy -.05 at $90.15; Gold & Silver: -.05 at $800 &
steady at $14.45; US $ up slightly vs. Yen and down slightly vs. Euro

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

Dec      +40/45 F           +30/32 H             +30/35 H         +??/75 Z
390

Jan       +51/55 F           +42/45 H              +40/55 H        +70/80 H
400

Feb       +40/44 H           +49/51 H              +50/60 H        +75/85 H
425

Truck                Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago                       -25 F     -4 H     -35 H

Toledo              -46 F     -14 H   -28 H

Dec ILL            -20 F     -6 H                  -8 F                -225
F

TREND:

The KC/Chi spreads in new crop got down to 20 cents and lower during the
early trade today. We saw this area as support on this relationship and were
able to execute orders at that level. Still looking for a test long term of
60 to 70 cents.

No change in my ideas about corn. This market is very methodical and
continues unabated in this move to the top side. We are seeing more farmer
selling and a curtailment of some demand so that we are due a
correction---but the counts imply a move to 4.21 on this leg?



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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