Linn Group Morning Corn Comment

CHICAGO - Dec 10/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed higher on Friday on the back of the limit up move in
the wheat market and the higher move in the soy complex.  Corn had been a
leader in grain complex earlier in the week on excellent demand, but it took
a backseat to the soybeans and wheat on Friday.  The wheat market was limit
up on Friday with the news that the weather in the world is not good, demand
remains very good, and more wheat exporting countries are closing their
exports for the time being.  Traders also point to a weak dollar as a major
reason for the recent rally in corn as So. Korea seems to be coming to the
US to snap up supplies every week.  Traders are looking for a reduction in
stocks that will be released on Tuesday morning before the opening.  The
average analysts' estimate has the ending stockpile at 1.888 bil bu vs. the
previous November forecast of 1.897 bil bu.  Weather in Argentina remains a
concern and China, which has long been a corn exporter is now widely
expected to be a corn importer, probably starting in 2008.  The biggest
indication that this will happen sooner rather than later is the aggressive
buying of US corn by So. Korea which usually goes to China first and the US
second.

eCBOT market was unchanged overnight even with the beans and wheat
continuing the rally that started in earnest on Friday.  Outside markets are
stronger overnight and the US$ is weaker which added to the increase in
prices of the soybeans and wheat should help support corn.  The corn market
is still the follower of the grain complex, but things could really heat up
when corn and beans start competing for acres.  We have been looking at
profitability studies of growing corn vs. beans and as the bean prices go
higher, it may make a case to plant beans instead of corn, even for farmers
that are used to getting 200 bu of corn on average.  Traders also looking
for a reduction in stocks when the USDA releases the supply/demand report
tomorrow morning before the opening.  Many traders are expecting a lower
stocks number and if this number comes in below expectations, watch out.  We
look for corn to open higher today in sympathy with the other grain markets
and it will be interesting to see if the grain markets extend the gains or
if they find selling on higher openings.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 399^6    0^2                   399^6    398^2

ZCH8                417^2    0^0                   417^4    414^4

ZCK8                427^4    -0^2                  427^4    425^0

ZCN8                435^0    0^0                   435^0    433^0

Early Opening Calls: 1-2 higher

Top News

-- In continued efforts to curb food price inflation, China's Sinograin, is
expected to sell up to 2.7 mln mt of central gov't wheat reserves to
domestic flour mills ahead the upcoming Chinese New Year season. Last week
they announced Tuesday would see the release of 500,000 mt corn to domestic
feed mills

-- USDA monthly supply/demand report Tuesday morning at 7:30 AM CT. Corn
ending stocks expected down 11 mln mt to 1.888 from prior report's 1.899

-- Dalian May Corn futures rose in overnight trading to 1743 Yuan/mt, a rise
of 8 Yuan over Friday's settlement

-- eCBOT Corn Vol: 151,608; Pit Vol.: 37,513; Open Interest change: +13,996

-- Outside markets. Energy complex -.10 at $88.15; Gold & Silver +5.0 at
$799 & +.015 at $14; US $ up slightly vs. Yen and down vs. Euro

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

Dec      +38/42 F           +31/34 H             +30/35 H         +??/75 Z
400

Jan       +48/52 F           +43/45 H              +40/55 H        +70/80 H
410

Feb       +38/42 H           +50/51 H              +50/60 H        +75/85 H
425

Truck                Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago                       -25 F     -4 H     -40 H

Toledo              -42 F     -12 H   -28 H

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

TREND:

Corn is being dragged higher by bean complex and wheat, marked with
continued good demand. Farmer selling has picked up at the higher price
levels. No China or Arg offers with those Gov closing the pantry door.
Brazil corn values are $90 a ton over US with them highly touted as the next
buyer of US corn to replace some of what they have exported.  Ethanol
margins under pressure with the break in energy prices.  New energy bill
calls for increased mandates for ethanol usage but it is yet uncertain as to
how we put margins back into making ethanol.



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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