Linn Group Morning Corn Comment

CHICAGO - Feb 5/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was strong on Monday as the markets found strength on fund
buying and overall good demand for corn.  The March contract closed 10 cents
higher and the December closed 14 cents higher.  The demand for grains has
not slowed down regardless of prices and aggressive buying by funds and new
money coming into the grain markets.  Wheat is leading the way again with MN
wheat limit up again as it makes a run at $15.00, dragging KC and Chi wheat
limit up.  The weak US$ is making US grains very cheap to the rest of the
world and exports remain very strong.  Early on Monday, the USDA announced
sales to Japan of 121,000 tones of corn.  Corn is still a follower and with
wheat limit up and beans up 40 cents, corn is going to follow if for
anything else, corn has to compete for acres.  Volume was light/moderate and
funds were estimated to have bot 15,000+ contracts yesterday.  The weather
in Argentina remains a non-factor as rains continue to be good and helping
the crops that saw early damage.

Corn closed slightly lower overnight after trading higher early in the
session.  Traders this morning pointed to profit taking after yesterday’s
big move higher and lower outside markets.  The energy, metal, and stock
market’s are lower this morning and overnight which helped push grains
lower.  Wheat is the leader of the grain markets right now, especially with
the short squeeze in the MN wheat.  Stats Can released stocks numbers that
were down 2-3 mmt which is a big shock and they said it was 6.5 mmt lower
than last year.  Some traders want to talk about MN wheat trading $15.00
synthetically already today.  This should help the other grain markets even
with the lower outside markets.  No new news on the corn markets today, so
it will continue to be a follower.  Export inspections were within the
estimates yesterday and we will see if exports remain strong when we see
weekly export sales on Thursday.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                508^2    -2^2                  512^0    506^2

ZCK8                520^0    -2^6                  524^0    518^6

ZCN8                530^4    -2^4                  534^6    529^0

ZCU8                530^0    -3^0                  534^2    530^0

ZCZ8                 530^4    -2^2                  534^6    528^6

Early Opening Calls: 2-3 cents lower

Top News

**Stats Canada Qtrly Barley Stocks: 7.11 mln mt; expected 7.1 mln mt

**Stats Canada Qtrly Oats Stocks: 2.70 mln mt

-- USDA fiscal 2009 budget projection: 88.0 mln acres of US Corn plantings
during 2008 vs. 93.6 mln & estimates the 2008 corn crop at 12.515 bln bu.
vs. 2007 13.074 bln

-- USDA fiscal 2009 budget projection: 71.0 mln acres of US Soybean
plantings during 2008 vs. 63.6 mln in 2007 & estimates the soybean crop at
2.950 bln bu. in 2008 vs. 2.585 in 2007

-- USDA fiscal 2009 budget projection: 65.0 mln acres of US Wheat plantings
during 2008 vs. 60.4 mln in 2007 & estimates the 2008 wheat crop at 2.350
bln bu. vs. 2.067 bln bu.

*USDA fiscal budget projections made in late 2007 & based on then current
conditions.

-- White House budget proposal sent to Congress will let the 54c/gal ethanol
import tariff expire when the FY 2009 budget begins Oct 1, 2008; however a
White House spokesperson said the administration will hold talks later this
year w/ Congressional members to discuss future plans

-- Feb 19th is tender deadline set by Turkey's grain board for 25-30,000 mt
of opt. origin Corn for March delivery

-- Export quotas totaling 1.203 mln mt has been set by Ukraine's gov't. Of
that total 200,000 mt is allocated to Wheat, 600,000 mt of Corn & 400,000 mt
of Barley, & remainder as Rye.  However the country's grain group suggested
exports would not begin until Mid-Feb.

-- USDA attaché to S Africa reported the country's Corn production for 07/08
MY would be 7.125 mln mt, with 2.81 mln of that as Yellow Corn & 4.315 mln
mt of White Corn.  The attaché also said for 08/09 MY output could be in
excess of 11 mln mt

-- S Africa grain stats office raised its Yellow Corn weekly imports to
24,498 mt from 20,761 mt seen last week.

-- S African White Corn exports were only pegged at 6,332 mt in latest week
vs. the 9,349 mt in the prior week acc. to the country's grain stats office

-- Monday's USDA Weekly Corn Inspections: 47.742 mln bu; expected 47.5 mln
bu

-- Dalian Corn futures for Sept delivery rose 6 Yuan to settle at 1,779
Yuan/mt ($1=7.19 Yuan)

-- Globex Corn Vol: 136,727; Pit Vol.: 36,666; Open Interest change: +5,859

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

-- Outside markets: Energy Complex -0.86 at $89.15; Gold & Silver: -17.8 at
$887.0 & -0.337 at $16.453; US $ is slightly higher vs. Euro and Yen

Cash Markets

-- CIF Corn off 1 to 4. Feb. +40 to +42, Mar. +42 to +44, Apr. +36 to +39,
May +40 to +43, June +41 to +43, July +40 to +45, Oct. +41 to +46, Nov. +41
to +48.



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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