Linn Group Morning Corn Comment

CHICAGO - Jan 11/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly lower on Thursday as traders evened up their
positions in front of the USDA report released this morning.  March corn
settled 2 ¼ lower as traders took profits on recent gains.  It was classic
consolidation before the release of a USDA report as corn was pressured
early, but couldn’t break technical support levels so there was no follow
through.  Weekly export sales were neutral and didn’t have any bearing on
market direction yesterday as everybody wanted to talk about the USDA report
and this week export sales being so strong.  The action was choppy with the
market up and down all day and volume was pretty good and funds bot 2,000
contracts with most of that being index fund rebalancing.

eCBOT market was stronger overnight in front of the USDA report this
morning.  The March and December were up 5 cents overnight which was a
little unexpected with the report being released this morning.  The USDA
report was bullish the corn market with a lower production number, a lower
stocks number, a lower yield number, but increased harvested acres.  See the
actual numbers below.  The big question is will corn hold a higher opening
today as corn has come a long way in the last 10 days.  Since Christmas,
corn has rallied almost 40 cents in the March and December contract.  Now
some of that rally is index funds with new money coming into the market, but
some of that is speculation into the crop report today.  Do you think they
are going to take profit today if corn is 10-15 higher?  I don’t know, but
there is sure to be some profit taking today and we will have to wait and
see if there is other buying to support the market.  The battle between corn
and beans for acres is really just beginning and you had a lot of traders
and money sitting on the sidelines until the release of this report so they
could be coming back into the market today.  Corn will called higher this
morning with calls ranging from 5 higher to 15 higher.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCH8                480^0    5^0                   480^4    473^4

ZCK8                491^6    5^4                   492^0    485^4

ZCN8                501^2    5^2                   501^4    495^0

ZCU8                498^4    4^4                   499^0    493^0

Opening Calls:  3-5 higher

USDA Report Data:

**US Jan Corn 07/08 Crop Prod: 13.074 bln bu.; est. 13.11; Nov Rpt 13.168

**US Jan Corn Yield: 151.1 bpa; est. 152.0 bpa; Nov Rpt 153.0 bpa

**US Jan Corn 07/08 Carryout:  1.438 bln bu. ; est. 1.70; Dec Rpt 1.797

**US Dec 1 Corn Stocks:  10.269 bln bu.; expected 10.6; Dec 06 = 8.933 bln

**World 07/08 Corn Carryout: 101.3 mmt; Dec Rpt 109.1

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

**Jan S Africa 07/08 Corn Output: 10.0 mmt; Dec Rpt 10.0

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

Top News

*USDA reported private sale Friday of 120,000 mt US Corn for 07/08 to
Unknown destination

*USDA reported private sale Friday of 296,000 mt US Corn for 07/08 to S
Korea

-- 566,000 mt of import Corn licenses granted by EU in previous 3 week, acc.
to EU data.  The latest weekly data shows total volume of licenses at 8.2
mln mt vs. the 2.6 mln seen last season

-- French Wheat exports in the July through Nov 30 '07 period were 4.97 mln
mt a decline of 6% vs. the same period in 2006. Meanwhile French Corn
exports fell 30% to 1.7 mln mt in the Jly-end-Nov period vs. Jly-Nov 2006,
Corn imports to the country were pegged at 677k mt a rise of nearly six-fold
as demand remained good from feed mills.

-- Gov't data shows Ukraine's 2007 Corn crop pegged at 7.42 mln mt up from
2006 production of 6.43 mln mt

-- Thursday Britain’s Ag dept confirmed Thursday 3 wild swans found dead was
due to H5N1 avian flu strain.

-- Dalian Corn futures fell 41c to $252.40/mt in overnight trading basis the
Sept contract.

-- eCBOT Corn Vol: 153,950; Pit Vol.: 40,090; Open Interest change: +10,182

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal Precip. The
Corn Belt will be dry today. Saturday will see some light showers. Sunday
into Tuesday looks dry. Temps near normal.

-- Outside markets: Energy Complex -.10 at $93.61; Gold & Silver: +0.4 at
$893.5 & -.095 at $16.175; US $ is up slightly vs. Euro and down vs. Yen

Cash Markets

-- CIF Corn steady 1 to 3. Jan. +28 to +34, Feb. +30 to +37, Mar. +37 to
+42, Apr. +32 to +35, May +34 to +37, June +32 to +35, July +34 to +38,



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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