Linn Group Morning Corn Comment

CHICAGO - Feb 4/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed mixed on Friday as the market couldn’t hold the early
gains.  The March contract closed down ¾ and the December closed 3 cents
higher.  The outside markets were weaker later in the trading session and
traders said they saw profit taking ahead of the weekend.  There were sharp
losses and the gold market sold off significantly after making the highs
early in the session.  Traders said the corn market is a follower and looks
to the other markets for direction and that is exactly what happened
yesterday.  The deferred months finished stronger as new crop corn continues
to fight for acres as we are hearing a lot of farmers moving out of corn and
into beans this year.  Volume was moderate/heavy and funds finished the
session buying 3,000+ contracts.  Traders said that part of the early rally
in the grain markets was tied to fund buying because it was the beginning of
the month and as soon as that buying dried up, the market headed lower on
profit taking.

The overnight markets were stronger even in the face of a favorable weather
report out of So. America showing good rains in Argentina and Brazil.  The
March and December contracts were up over 5 cents overnight right from the
beginning and held those gains through the morning close.  Traders this
morning want to talk about the huge winter storm that is hitting China and
the repercussions being felt through the agriculture world.  This storm is
hitting key wheat and rapeseed areas.  Technicians are pointing to strong
weekly charts as also giving the market momentum into the beginning of a new
week.  Traders pointed to the higher soybean and wheat market for helping
corn trade higher and hold the gains.  The corn market is competing for
acres this spring here in the US and as long as beans keep going higher,
corn has to follow.  Speculators seem to be getting involved as well with
open interest jumping 16,000+ contracts on Friday which is a positive sign
for prices.  The demand for corn remains strong as we see weekly export
sales continue to beat estimates almost every week.  The corn market should
open in-line with where it closed overnight and then look for direction.
The oilseeds are leading the grain complex and with the weather problems in
China, this should only accelerate.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                505^6    5^2                   506^4    501^2

ZCK8                518^0    4^6                   518^4    513^2

ZCN8                527^4    5^2                   528^2    522^0

ZCU8                525^6    5^6                   525^6    524^6

ZCZ8                 524^6    5^6                   525^4    519^0

Early Opening Calls: 3-5 cents better

Top News

-- USDA reports private sale of 121,920 mt of US Corn sold for 07/08 MY to
Japan

-- Argentine grain exchange estimates the country will produce 20.5 mln mt
of Corn this year, down 8.9% from year ago.

-- Trade data shows 6.9 mln mt of US Corn bought by S Korea through Jan 24,
up from the 2.3 mln mt seen in the same time frame last year, traders note
high wheat prices & lack of Chinese corn exports are prompting buyers to
seek US Corn for feed purposes.

-- EU officials says internal sales of Hungarian Corn totaled 27,220 mt at
price of 193.5 Euros/mt

-- Archer Daniels Midland reported earnings of 73c/shr for fiscal 2Q up from
67c/shr seen in the year ago same quarter. Fiscal 2Q Revenue grew to $16.5
Bln from $10.98 bln in same period.

-- Dalian Corn futures rose 21 to settle at 1,773 Yuan/mt in overnight trade
($1=7.19 Yuan)

-- Globex Corn Vol: 174,760; Pit Vol.: 44,459; Open Interest change: +16,011

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Above
Precip. The Corn Belt will see rain, snow and snow showers today into
Thursday. Friday into Sunday looks dry. Temps near to above normal.

-- Outside markets: Energy Complex -0.35 at $88.61; Gold & Silver: -6.2 at
$902.1 & -0.108 at $16.747; US $ is slightly lower vs. Euro & is slightly
better vs. Yen

Cash Markets

-- CIF Corn steady Feb. +43 to +45, Mar. +46 to +49, Apr. +40 to +42, May
+42 to +45, June +41 to +44, July +41 to +44, Oct. +41 to +47, Nov. +43 to
+47.

TREND:

Chi wheat continues the weak leg. The only thing driving gains in Jly is the
bear spreads. Hold to this thought selling rallies and trying to maintain a
negative bias. It may take a spring time weather scare or a rally from
another market to take the old crop back into new highs. This market feels
tired and is being supported by the short covering in the front months of
spring wheat

Corn almost got the rally started in earnest this week but all it did was
manage to come back from the lower side of the trading range back to the
top. It is most likely to extend the gains eventually to a move that takes
out the 5.20 highs and pushes the market toward 5.60.



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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