Linn Group Morning Corn Comment

CHICAGO - Jan 16/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly lower yesterday on choppy trade after making
new highs early in the session but unable to maintain any gains.  The March
contract closed 3 lower and the December contract closed 1 ½ lower.  Traders
said the corn market seems to be having trouble after the USDA report is
over and there are no other reports until March and the investment fund
money that came in at the beginning of the year is probably finally over,
for now.  Traders said the deferred months are coming the forefront of trade
because of the battle over acres this spring in the US.  Traders also
pointed to new crop/old crop spreading as helping keep the March and July
corn contracts lower.  Traders are also looking at the outside markets for
price direction with the crude oil down over $2.00 on the day and gold
selling off big after the grains closed.  Funds were on the sell side at
3,000+ contracts at the end of the day.  Weather in So. America seems to be
a non-factor today as the current forecasts haven’t changed and rain is
expected this weekend in Argentina to some of the most needed areas.  This
rain event has been looked at for the last week, so it needs to happen.

The eCBOT market was lower overnight as the corn market found sellers late
in the session as outside markets are really getting beat up.  Gold was down
over $24 overnight, crude was down another $1.50 and the stock market was
much lower.  With no new news, the grains will look at the outside markets
and traders will be inclined to take some profits after the recent move
higher.  Yesterday’s action in corn with new contract highs, but aggressive
selling on the higher move will not be looked upon favorably by the market.
Traders also talking about the general turndown in the stock markets across
the world as possibly having a negative affect on the grain markets because
of lower demand, especially in China.  The weather picture in Argentina
overnight looks the same as it has the last couple of days, but the rains
forecast this weekend and next week need to happen.  The corn market will be
lower this morning along with the night session and we will see where we go
from there.  Will the market see more profit taking?  Will there be support
on a sell off in the corn market?  These questions will be key to what
happens today.  Weekly export sales will be released tomorrow morning and
should be strong as we already have 1.0 mil in sales announced by the USDA.
So. Korea and Taiwan both bot US corn overnight.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCH8                505^2    -3^6                  509^0    505^0

ZCK8                517^6    -3^6                  521^4    517^6

ZCN8                528^2    -4^2                  532^0    528^2

ZCU8                528^4    0^2                   528^4    527^0

Early Opening Calls:

Top News

-- China's development & reform commission have implemented price controls
on a wide variety of goods including vegoils, grains for food, meat products
& energy products.  The gov't agency said price controls took effect
yesterday & will remain until prices stabilize

-- Mexico's Ag Sec office forecasts 2008 Corn production at 25.2 mln mt up
from 2007 production of 23.7 mln mt

-- Sugar Corp of Taiwan, a state run company, agreed to buy 35,000 mt of US
Corn for delivery in Feb, cash traders say the price was $335/mt

-- French Corn ending stocks for the 2007/08 crop year were pegged at 2.90
mln mt down from the prior month forecast of 2.96 mln mt as the ONIGC
slightly raised its export estimates to EU & Non-EU countries

-- Analyst say the Baltic Exchange bulk dry commodity shipping index has
lost about 12% in the past 3 days. Tuesday the index lost 4.2% of its value
& analysts attribute the fall on seasonal shipping downturn, congestion at
key ports & a reversal of a market near a peak

-- In response to FDA report ruling cloned animals safe for human
consumption, Tyson Foods issues statement saying it has no plans to purchase
cloned livestock & further suggest it will be a long time before cloned
livestock enters the retail market chain supply

-- Dalian corn futures fell 26 Yuan to 1,823 Yuan/mt in overnight trade.
($1=7.237)

-- eCBOT Corn Vol: 209,166; Pit Vol.: 59,768; Open Interest change: +16,648

-- Weather: 6-10 Day Forecast: Below Normal Temps. Below Normal Precip. Most
of the Corn Belt will be dry today. Thursday will see snow and snow showers.
Friday into Sunday looks dry. Temps below to much below normal.

-- Outside markets: Energy Complex -.97 at $90.94; Gold & Silver: -12.4 at
$890.1 & -0.262 at $16.043; US $ is slightly better vs. Euro, down vs. Yen

Cash Markets

-- CIF Corn up 1 to 8. Jan. +32 to +36, Feb. +34 to +37, Mar. +35 to +39,
Apr. +29 to +35, May +31 to +37, June +28 to +34, July +32 to +38,

TREND:

New crop wheat into new contract highs. Now what. This market is bouncing
around like crazy and the exchange wants to expand the trading range to 70
cents?

We remain committed to the corn/wheat spreads but feel that on days when the
market wants to rally they give you a chance to get them on better so it can
be a trading strategy to take profits when given the opportunity.



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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