Linn Group Morning Corn Comment

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

The corn market was higher on Monday making new all time highs as it
followed the other commodity markets higher.  The story of the day seemed to
be the soybean oil market as it traded nearly limit up almost the whole
session before closing limit up.  The May contract closed 10 cents higher
and the December contract closed 11 ¼ higher.  The corn market opened
higher, made new all-time highs before settling back and trade in a tight
range most of the day.  Traders pointed to speculative buying and general
inflation fears as driving the price of corn.  Crude oil, which was lower
early in the morning, was up over $2 by the time the grains opened and that
helped the crude oil markets.  Traders also continued to talk about news out
of China that they may consider importing more grains to help ease inflation
pressure they are feeling at home.  Remember, China has always been a corn
exporter, but many expect China to export almost nothing this year and
possibly be a corn importer in 2009.  News that China is importing corn
would be huge for this market.  The demand for corn will remain good despite
the higher prices, especially with the US$ making new lows against major
currencies, thus making US corn cheaper than corn from other countries.
Weather in Argentina is a non-factor and traders aren’t even paying much
attention to it anymore.  Volume was moderate/heavy and funds we net buyers
of 8,000+ contracts on the day.

The corn market was lower overnight on profit taking as we saw a sell off in
the soy complex after initially trading higher.  The grain markets have been
moving higher and a pull back is not unexpected.  After the corn market was
up almost 10 cents in all months yesterday, the May, July and December
closed 3-4 lower overnight as traders looked at a lower oilseed market and
took some profit.  The corn market is a follower right now and the soy
complex is leading.  There is also some talk yesterday and today about
Brazil starting to use GMO corn instead of conventional seed, thus ending
EU’s place to buy cheap non-GMO grain for food usage.  Besides the news out
of China, there is very little new news out that affects the corn market.
The calls this morning will be 3-5 lower, but corn will look to other
markets for direction.  Outside markets, crude and metals, are all higher
this morning and the US$ is weaker which should be supportive of grains, but
the soy complex, especially the bean oil market will lead the grain markets
right now.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                549^0    -6^4                  560^4    546^6

ZCK8                562^2    -4^2                  572^2    556^0

ZCN8                574^4    -3^6                  583^6    568^0

ZCU8                574^4    -3^4                  580^0    568^4

ZCZ8                 573^6    -2^4                  582^0    567^6

Early Opening Calls: 3-5 cents down

Top News

-- Malaysia reportedly buys 40,000 mt of Corn from India at $273/mt, acc. to
industry official quoted by dow jones

-- March 7 is first day of Goldman Sachs commodity index roll period

-- EIA Report:  Dec Ethanol Production expanded +5.6% to 15.161 mil
bbl/month - equivalent to nearly 7.7 bil gal/yr of online capacity

-- EIA Report:  US Ethanol stocks down -6.5% from November to 10.509 mil

-- Monday's Weekly Corn Inspections: 47.098 mln bu; expected 42.5 mln bu

-- Corn futures on the Dalian exchange were mostly higher, Sept rose 13 yuan
to 1,869 yuan/mt

-- Globex Corn Vol: 198,324; Pit Vol.: 31,029; Open Interest change: +6,703

-- Weather: 6-10 Day forecast: Normal to Above Temps. Below Normal Precip.
Snow and rain will move across the eastern Corn Belt today . Dry Wednesday
and Thursday. Some light rain or snow Friday. Dry Saturday and Sunday. Temps
normal to below.

-- Outside markets: Energy Complex -0.09 at $102.36; Gold & Silver: +0.9 at
$984.5 & +0.403 at $ 20.470; US $ is steady better vs. Yen & is slightly
lower vs. Euro

Cash Markets

-- CIF Corn steady off 2. FH Mar. + 40 to +43, Mar. +39 to +42, Apr. +38 to
+41, May +41 to +45,June +38 to +41, July +41 to +45, Oct. +44 to +47,
Nov.+44 to +47.

TREND:

Wheat rally done? Should have been sold today in this silly trade. Close
under the gap at 10.50 important and bearish next support at 9.50. Should
get there in a hurry

Corn moved into new contract highs today. CK and CN taking aim on $6.00 and
possibly higher. Trade very sluggish compared to other markets

Market may be getting closer to a correction time. Take note



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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