Linn Group Morning Corn Comment

CHICAGO - Dec 11/07 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly higher on Monday after being unable to take
advantage of early gains and push the corn market higher.  The March
contract closed ½ higher and the corn market only had a 4 cent trading
range.  Traders pointed to the early gains coming off technical buying and
the gains in the wheat.  Wheat almost traded limit up early in the session
before settling back off the highs, but still up 8 cents on the day.
Traders yesterday said the lack of new news and the release of the USDA
supply/demand report were part of the reason that corn consolidated late in
the session.  They also said that wheat closing almost 20 cents off the
highs contributed to corn being unable to extend the early gains.  Weekly
import inspections were lower than expected at 38.426, vs. last weeks
inspections of 56.658 and the estimate of 50-55 mil bu.  One trade said he
thought the corn market seemed to just run out of steam yesterday as traders
waited for the USDA report and there wasn’t any news.  China sold only about
½ of the expected corn out of reserves as traders said many users feel that
prices are going to decline and they may be waiting for the lower prices.
Argentine weather also remains supportive of corn prices as rains remain
scattered without wide coverage and forecasters see a dryer weather pattern
developing.

eCBOT market was down a little overnight on light trading as traders awaited
the release of the USDA report this morning.  The average analysts estimate
for corn ending stocks was 1.879 vs. November estimate of 1.897 and the
actual number was 1.797.  This was lower than expected so it should be
supportive of the corn market, but remember, the market has been talking
about a lower number for the last week, so this could be the time we see buy
the rumor, sell the fact.  The corn market should open higher, but will we
see buying on a higher market or profit taking.  Corn is still considered a
follower in the grain complex, so it will look to the other markets for
direction.  Outside markets will be quiet today as everybody awaits the
decision by the Federal Reserve on a rate cut, with most expecting a ¼ pt
rate reduction.  The corn, beans, and wheat will all be called higher this
morning and it will be key to see if they can extend gains or if the recent
run up will met with profit taking today on a higher opening.  Now that the
USDA report is out of the way, we will start to hear more talk about So.
American weather and fund re-allocation.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCZ7                 400^0    -0^4                  400^0    399^2

ZCH8                417^0    -0^6                  417^6    416^2

ZCK8                427^2    -0^6                  428^0    426^4

ZCN8                435^0    -0^2                  435^2    434^0

Opening Calls: 3-5 higher - post report

Top News

**US Dec Corn 07/08 Carryout: 1.797 bln bu. ; est. 1.88; Nov Rpt 1.897

**US Dec Corn 07/08 Crop Prod: 13.168 bln bu.

**World 07/08 Corn Carryout: 109.1 mmt; Nov Rpt 110.39

**Dec China 07/08 Corn Output:  145.0 mmt; Nov Rpt 145.0

**Dec S Africa 07/08 Corn Output: 10.00 mmt; Nov Rpt 10.5

**Dec Argentina 07/08 Corn Output: 22.5 mmt; Nov Rpt 22.5

-- Only 238,000 mt of Corn was bought by Chinese feed mills in Tuesday
auction held by China's state grain reserves, prices ranged between
1760-1850 Yuan/mt. Up to 500,000 mt of Corn was offered from state reserves

-- Monday's USDA Corn Export Inspections:  38.426 mln bu; expected 53.0 mln
bu

-- Dalian Corn futures were 6 Yuan higher at 1743 Yuan/mt basis the May
contract, rest of complex was higher

-- eCBOT Corn Vol: 123,174; Pit Vol.: 29,119; Open Interest change: +9,396

-- Weather: 6-10 Day Forecast: Above Normal Temps. Below Normal Precip. The
Corn Belt will see periods of rains and snow today into Thursday.

-- Outside markets. Energy +.88 at $88.75 ; Gold & Silver: -2.6 at $805 & up
slightly at $14.7; US $ is trading higher vs. the Yen , steady vs. the Euro.

Cash Markets

-- CIF Corn steady. Dec. +?? to +34, LH Dec. +36 to +38,, Jan. +44 to +46,
Feb. +50 to +53, Mar. +51 to +53, A/M +40 to

+42 J/J +40 to +42



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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