Linn Group Morning Corn Comment

CHICAGO - Mar 7/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed mixed on Thursday fighting off the big sell off in
the soy complex.  The May contract closed up ¼ and the December contract
closed 2 cents higher.  The corn market actually opened higher on spec
buying and continued talk of a lot less corn acres than the USDA is
suggesting.  The pressure in the corn market is coming from the soy complex
as we see huge fund liquidation with the bean oil closing limit down and the
beans closing limit down or near limit down.  The corn market is having a
hard time staying higher with the big sell off in the soy complex and with
the lack of any real news, the corn will follow the rest of the grain
complex.  Export sales released before the opening yesterday were a little
disappointing, but I don’t know how many traders actually looked at the
exports sales.  This time of the year, it is not uncommon for US corn to
come out of favor with the So. American harvest heating up and their corn
being cheaper than the US.  Volume was heavy yesterday and funds were
sellers of only 1,000 contracts.

Overnight, corn joined the fund liquidation closing over 11 cents lower in
most months.  The bean complex is leading the grains lower with the bean oil
closing limit down and the soybean closing almost limit down.  Very little
new news out on the grain complex but rumors keep persisting that we are
seeing a major fund liquidating or we are seeing just plain old profit
taking by funds after the run up in grain prices since Jan 1st.  The USDA
will release its forecast for planted acres at the end of the month, but we
continue to hear from farmers and seed guys that the corn acres are going to
be down, possibly significantly lower than what the USDA released back in
February.  This talk should help support the new crop corn contracts, but
fund liquidation will take the market lower until they decide they are done.
We should see some active commercial pricing if corn gets too low, but the
big question is what is too low, the market will decide.  Trying to pick
tops and bottoms is very hard, and can hurt you in the pocket book as well
as psychologically.  We look for corn to open lower, in-line with the
overnight closes, but we would like to see the market come back or corn
could take a negative tone.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                545^0    -12^0                 556^2    545^0

ZCK8                555^6    -11^4                 566^4    555^6

ZCN8                568^0    -11^0                 578^6    568^0

ZCU8                568^2    -10^6                 578^0    568^2

ZCZ8                 566^0    -13^2                 579^0    565^0

Early Opening Calls: 10-12 cents down

Top News

*USDA reports private sale of 125,000 mt of US Corn sold to Mexico for the
07/08 MY

-- Ukraine Feb 2008 grain exports fell to 162,986 mt vs. same month year ago
when the country exported 356,300 mt, but this Feb.’s figure is above Jan
exports of 25,100 mt, acc. to local ag analysis firm UkrAgro.  The firm said
Corn made the bulk of Feb export at 100,500 mt.

-- Corn futures on the Dalian exchange were lower, active Sept fell 24 to
settle at 1,844 Yuan/mt ($1=7.10 Yuan)

-- Globex Corn Vol: 197,730; Pit Vol.: 25,941; Open Interest change: -2,122

-- Weather: 6-10 Day forecast: Below Normal Temps. Normal to Above Precip.
The eastern Corn Belt will see snow and rain today ending Saturday. Most of
the Belt will be dry Sunday into Tuesday. Temps normal to below.

-- Outside markets: Energy Complex -0.76 at $104.71; Gold & Silver: +3.5 at
$980.7 & +0.411 at $20.542; US $ is down vs. Euro & Yen

Cash Markets

-- CIF Corn up 1 to 5.Mar. +38 to +40, Apr. +37 to +40, May +42 to +45,June
+36 to +38, July +40 to +41, Oct. +39 to +41, Nov. +39 to +44.

TREND:

Corn has support and does not seem to have the length that has created the
liquidation weakness in beans. This market is still living on the concern of
reduced new crop acres. There is a major concern about the health of
domestic consumers with livestock feeders bleeding red ink in all sectors.
Sow and cow liquidations showing in the sales barns certainly points to
healthier feeders around the corner. Will be one of the next boots to food
inflation as the supply shrinks. However, this is also negative corn and
meal demand. You should have received an ethanol wire earlier today. The
margins took another hit today giving back about 20 cents in spot margins
over the last two days.

Until the fund liquidation is through, it is very difficult to project where
this market will stabilize. There will be more consumptive demand surface on
the weaker cost. Look for the bean complex to hold first and the rally could
be resounding? Current concerns about larger crops in So Amer will melt away
with a new round of export interest?



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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