Linn Group Morning Corn Comment

CHICAGO - Mar 13/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower on Wednesday as traders took profit on recent
rallies and traders liquidating their long corn / short wheat spreads as
wheat continues to push higher.  The May contract closed 5 ¼ lower and the
December closed 6 ½ lower.  The volume was moderate compared to previous
days and funds were net sellers of 7,000 contracts.  Traders hearing of
rumors that a big, well known fund has been liquidating over the last week
and other funds were covering their corn/wheat spread positions.  You can’t
dismiss the crude oil market has helped to support corn prices as it just
keeps going higher with the April contract trading above $110 a barrel
higher on Wednesday, but the corn seemed to shake off the new highs and
close lower.  Talking to cash traders, they said there was some good farmer
movement because of weakening basis levels that had strengthened with the
higher prices over the last month or so.  Traders said the corn market will
have a tough time making new highs until we get the USDA report at the end
of the month and/or traders start talking about weather and plantings.
Overall, even with the down market, corn was pretty quiet on Wednesday.

Overnight, corn was slightly higher on a pretty quiet trade.  The May, July,
and December contracts all closed up app. 1 higher after trading as much 3-4
lower overnight.  Weekly export sales released this morning were within the
estimate, but on the light side.  Traders estimated export sales this week
at 600,000 to 1.0 mil and actual sales were 768,000.  This was not
unexpected because of the higher corn prices, but US corn is still the
cheapest corn available for importers.  Even with the beginning of harvest
in So. America, US corn is still priced cheaper.  Traders haven’t really
looked at export sales lately as this data has been on the back burner as
other news and fund trading has been at the forefront.  We look for the corn
market to open in-line with the overnight markets and then look for
direction from the crude oil market and the soy complex.  The market is
probably in a holding pattern until the release of the USDA report at the
end of the month unless there is new news that hits the markets.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                558^2    1^4                   558^2    553^2

ZCK8                568^6    1^4                   568^6    563^0

ZCN8                580^4    1^0                   580^4    575^2

ZCU8                579^0    0^2                   579^0    575^0

ZCZ8                 580^0    1^0                   580^0    573^6

Early Opening Calls: 1-3 cents better

Top News

-- Dalian Corn futures for Sept delivery were 8 Yuan lower and settled at
1,813 Yuan/mt.

-- Globex Corn Vol: 146,402; Pit Vol.: 25,001; Open Interest change: -3,881

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Above
Precip. Most of the Corn Belt will be dry today. Friday will see some
showers. Saturday will see some rain and snow favoring the southern areas.
Sunday dry. Temps near normal.

-- Outside markets: Energy Complex +0.19 at $110.11; Gold & Silver: +14.6 at
$995.2 & +0.721 at $20.700; US $ is lower vs. Yen & Euro

Cash Markets

-- CIF Corn steady off 3. Mar. +?? to +42, Apr. +?? to +41, May +39 to +43,
June +34 to +38, July +42 to +44, Oct. +38 to +42, Nov. +38 to +42.

TREND:

Wheat continued to chase shorts today. Rumors of Tudor and others getting
out of beans/wheat but there are other inter-market spreads that have come
unglued with Chi short running for the door---the problem is that open
interest has continued to grow and does not show much in the way of
liquidation yet---even with a $2.00 rally. May mean there is more to come.

Canola was able to close firm for the second close over the gap---should
make this trade solid but the reversals will still create problems on a
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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