Linn Group Morning Corn Comment

CHICAGO - Feb 14/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed lower on Wednesday as we continued to see liquidation
in wheat and little to no news.  The March contract closed ¾ lower and the
December closed down 1.  There is very little new news out on the corn
market, so it is looking for outside markets for direction and wheat is that
outside market right now.  The exchanges have raised margins and trading
limits in an attempt to get wheat to trade and find out how high prices can
go and it seems to have worked for now.  Wheat/corn spread liquidation has
helped support corn prices on breaks and it seems like corn finds buyers on
any break.  Corn did recover from early lows as we saw crude oil and the soy
complex, specifically bean oil, rally late in the session and help the corn
market move higher.  The volume was light/moderate yesterday and funds were
light sellers of 1,000 contracts on the day.

Overnight, the corn market moved higher after we saw a strong rebound in the
wheat market and soybeans and bean oil moved higher.  The wheat market is
the leader along with the oilseeds right now and with both of those markets
rallying up strong overnight, corn came along for the ride.  Technicians
will tell you that the corn market is still in a trading range and it will
take some new news or a strong rally in the other grain markets to get it to
break out of the trading range.  Export sales released this morning were
within the estimates and were once again very good.  Traders were expecting
export sales of 800,000 to 1.0 mil and actual sales were 932,400.  Some
traders said they think that the market has gotten used to the higher prices
and the bottom line is they need corn and are going to have to pay the
higher prices, because it doesn’t look like prices are going a lot lower
even if they have record yields.  We haven’t seen the huge sales the last
couple of weeks, but then again, demand isn’t going anywhere.  Weather in
So. America remains conducive to crop development and harvest of beans in
Brazil.  Both Brazil and Argentina remain The corn market is a follower
right now and wheat and oilseeds are leading the grain complex.  The corn
market should open higher in-line with last nights action and then look to
the other grain markets for direction.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                502^2    5^2                   503^2    496^4

ZCK8                514^6    5^0                   515^2    509^0

ZCN8                525^0    5^0                   525^4    519^2

ZCU8                524^6    5^2                   525^0    520^0

ZCZ8                 524^4    5^2                   525^0    519^0

Early Opening Calls: 4-6 cents better

Top News

**USDA Export Sales, Corn:  932,400 in 07/08 marketing year, 48k in 08/09
year

-- Globex Corn Vol: 162,383; Pit Vol.: 48,918; Open Interest change: -939

-- Weather:

-- Outside markets: Energy Complex +1.08 at $94.35; Gold & Silver: +0.2 at
$905.7 & -0.118 at $17.236; US $ is lower vs. Euro and is steady vs. Yen

Cash Markets

TREND:

Had it not been for the Limit up Mpls Mch contract today the other wheat
markets might have been limit down. That single contract and the tight cash
implied was enough to prevent some sellers from carrying the short home.
There is no chance of US wheat trading into Egypt but do expect them to be a
buyer on this break. Do not be surprised if European offers do not follow US
futures down? Sell small 15 to 20 cent rallies in Chi wheat. The Jly is
safer but some will want to try the May due to inverses that are sure to
melt away?

Use a test of 4.90 to buy CH to extend user coverage.  Not sure the CH is
ready to trade above 5.10 to 5.15 until the options expire next week.  Lot
of corn/wheat to support this market today.



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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