Linn Group Morning Corn Comment

CHICAGO - Feb 6/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly lower, mixed yesterday after trading in a
pretty tight range all day.  The  March contract closed down 1 ¼ and the
December closed down ½.  With very little new news out on the corn market,
it has been looking at the other markets for direction.  Considering what
the outside markets did yesterday, gold down almost $20, Dow down 350pts,
crude down over $2.00, corn holding steady was impressive.  Wheat remains
the wild/scary market with MN wheat trading as much as $1.50 over the limit
yesterday and the Chicago and KC wheat markets in March closing limit up.
As one veteran trader said yesterday, trying to pick a top in the wheat
market is going to give you an education you would probably rather not have.
Volume was light/moderate with funds selling 1,000+ contracts on the day.
Corn still has excellent support below the market as was evidenced yesterday
trying to give back the gains on Monday, but unable to maintain any attempt
to sell the market.

Overnight, the corn market was higher on the back of the wheat market and
higher outside markets overnight.  With the release of Friday’s USDA
supply/demand report, traders will start to position themselves ahead of the
report as several analysts expect the USDA to trim several million bu from
the gov’t ending stocks for 2007/08.  Exports remain very strong and the
market will await the release of the weekly export sales tomorrow morning.
The weather in Argentina remains a non-story with hot weather forecast for
this week, but cooler/wetter weather forecast for next week.  The crop
development in Argentina remains pretty good, but nothing like the record
yields/production many hoped to have when they started planting.  The USDA
projected 2008 corn plantings at 88 mil acres, but as we know, this is just
a guess because they don’t talk to any farmers or do any type of survey,
they just use annual fiscal budgeting.  The corn market was higher overnight
and we should open in line with the night closes and then look for
direction.  The wheat market front months are all limit up again overnight
and that should lend support to the other grain markets and the outside
markets are also higher.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                513^2    4^0                   516^0    509^4

ZCK8                525^4    3^6                   528^0    521^2

ZCN8                534^0    1^0                   538^4    532^4

ZCU8                535^4    3^2                   536^0    532^0

ZCZ8                 535^0    2^4                   537^0    532^6

Early Opening Calls: 2-4 cents better

Top News

-- 48,000 mt of US or S American Corn sought in tender by Israeli group for
delivery between mid May & early June

-- Opposition was expressed by Nat'l Grain & Feed group to the CFTC about
the CFTC's proposal to exempt index & pension fund spec positions under
"risk-management exemption" rule. The grain group says the new rules would
amplify the current problem of convergence at futures expiration & hurt
traditional hedgers ability to finance margin calls on hedges that are part
of loan covenants.

-- Egypt's GASC on Wednesday buys total of 150,000 mt of Wheat. 95,000 mt
were of Russian origin, 30,000 mt were from Kazakh & 25,000 mt were US Soft
Red Wheat.  Wheat was priced in Egyptian pounds.

-- Dalian, China's New Year holiday Feb 6 - 12, Dalian Corn & Soybean
futures will resume trade on Feb 13th

-- Globex Corn Vol: 160,620; Pit Vol.: 46,511; Open Interest change: +13,447

-- Weather: 6-10 Day Forecast: Above Normal Temps. Above Normal Precip East,
Below West. The Corn Belt will see rain and snow today. Thursday looks dry.
Friday into Sunday will see snow flurries. Temps will fall to below normal
by late in the weekend.

-- Outside markets: Energy Complex +0.30 at $88.71; Gold & Silver: +10.9 at
$897.8 & +0.206 at $16.553; US $ is down slightly vs. Yen and is up slightly
vs. Euro

Cash Markets

-- CIF Corn steady to off 6. Feb. +34 to +37, Mar. +38 to +42, Apr. +36 to
+40, May +40 to +43, June +40 to +42, July +40 to +44, Oct. +41 to +46, Nov.
+41 to +48.

TREND:

It would be nice if I could say something smart about wheat---but 170 over
limit. Best to say nothing. It says it all for itself. Other wheat markets
certainly tagged along and new crop spring wheat was also able to keep up in
spite of ability to add acres in the spring planting season.

Corn and beans were not able to hold together or the rallies. Felt several
times today that they might get the same exuberance as wheat. These markets
performed quite well considering the weakness in the metals and energy
markets. Nothing changes with a high probability that we extend the gains
and make new highs in corn in this rally.



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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