Linn Group Morning Corn Comment

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

The corn market yesterday sold off following the soybean market and just
about every other commodity market lower as we saw a general commodity sell
off.  The story yesterday seemed to be the soy complex as we had the bean
oil trade close to limit down before locking limit down in the last 2 hours
of trading.  The corn market actually recovered on the close.  All months in
the corn were limit down 20 cents before the late recovery with the May
closing down 12 ½ and the December closing down 8 ¾.  Outside markets also
contributed to the sell off with the crude oil market down over $3.00 by the
end of the session.  The soy complex was the leader of the grain markets
with not only bean oil, but some months in soybean closing limit down.
Volume was moderate/heavy and funds were estimated to have sold 6,000+
contracts.  Traders said that corn’s recovery late in the day may have been
some short covering after traders couldn’t keep it limit down like the soy
complex and the market saw a rally in the wheat market late.  The weather in
Argentina remains a non-factor, but analysts are saying that the late season
weather pattern is usually conducive for filling corn ears.  Very volatile
trade right now as traders start to look forward to the USDA release of
planting intentions at the end of the month.

Overnight, the corn market recovered more of the losses yesterday as the
bean complex come back higher as well after volatile trading early in the
session last night. The May, July, and December were all up over 6 cents
last night, recovering half the losses from yesterday.  Corn is still a
follower in the grain complex, so with beans recovering some of their losses
and closing higher, corn followed along.  Corn hasn’t had the huge run up we
have seen in the beans and bean oil this spring, the downside should be
muted when compared to those markets and it seems that corn has found end
user support on breaks.  Yesterday had the making’s of an overall general
commodity sell off as we had almost every commodity in the red yesterday as
traders speculated there was fund selling, taking profits on the run up so
far this year.  China announced overnight in their Parliamentary meetings
that it would do everything it could to protect its domestic food supply
even if it has to import grain and it has stopped any further ethanol
production.  This is just rhetoric and you can’t always believe what the
Chinese say, but this shows they are concerned about the grain markets.  The
corn market will look to the outside market for influence today, especially
the soy complex.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                549^4    6^4                   549^4    540^0

ZCK8                561^0    6^4                   562^0    551^2

ZCN8                573^0    6^2                   573^6    563^0

ZCU8                572^4    7^4                   573^2    564^4

ZCZ8                 573^6    6^4                   575^0    564^0

Early Opening Calls: 4-6 cents better

Top News

- Iowa banking regulator tells US Congress problems could arise & ripple
through the economy from too much lending against inflated farm land values,
likens the current period to that of the 1970s before the fall in 1980s

-- Chinese gov't extended its reduced Soybean import tax of 1% until Sept
30th in effort to help control domestic prices

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

-- CME group advisory notes Good Friday holiday falls on March 21, 2008, the
third Friday of March (the traditional March quarterly expiration date),
subsequently all March 2008 Equity index futures and options will expire on
Thursday, March 20, 2008 instead of Friday, March 21, 2008.

-- Dalian Corn futures slipped 17 Yuan to 1,852 Yuan/mt in overnight trade

-- Globex Corn Vol: 259,110; Pit Vol.: 40,966; Open Interest change: -13,287

-- Weather: 6-10 Day forecast: Normal to Above Temps. Normal to Below
Precip. Other than a few light flurries favoring the north most of the Corn
Belt will be dry today and Thursday. Friday will see some light snow east.
Saturday and Sunday mostly dry. Temps normal to below.

-- Outside markets: Energy Complex +1.28 at $100.81; Gold & Silver: +6.7 at
$973.2 & +0.125 at $19.846; US $ is slightly better vs. Yen & is slightly
lower vs. Euro

Cash Markets

-- CIF Corn off 2 to 10. Mar. +?? to +35, Apr. +?? to +37, May +?? to +40,
June +?? to +37, July +?? to +41, Oct. +35 to +40, Nov. +35 to +40.

TREND:

The corn market has quickly corrected off our near term targets at $5.70 and
settled into support at $5.50 on May. Look to buy this $5.50 to $5.55 range
or go to the July in the $5.60 to $5.65 area. Risk a close under $5.45 on
May or $5.50 July which should be our new support shelf for this corn
market. A close over $5.80 on July would confirm our next count over $6.00.
Still view 20-cent breaks as buying opportunities for this current bull
trend. December is also reacting to near term counts but the $5.50 to $5.60
are should handle this current setback as well.



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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