Linn Group Morning Corn Comment

CHICAGO - Mar 17/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower on Friday as we saw it follow the soy complex
lower, but it did recover off its lows made early in the session.  The May
and July were a little over 10 cents lower and the December was 8 ¼ lower,
but all were well off the lows as most months at least hit limit down
earlier in the session.  The grain markets were awaiting the release of the
Informa numbers at 10:30 and after those numbers were released, the market
seemed to look at outside markets and outside news for direction.  The
Informa acreage numbers were lower than their February estimate, but maybe
not as low as some were expecting.  The stock market seemed to come under
attack yesterday along with the rest of the markets with news that Bear
Stearns, a huge stock/investment banking firm was in trouble and had to be
bailed out by JP Morgan and the US gov’t.  This caused general unrest in all
markets and traders/funds/farmers selling to get cash to be defensive.  The
soy complex was the main reason for the big sell off as we saw beans and
bean oil close limit down.  The corn market is still a follower and will
look to other markets for direction.  Volume was moderate on Friday and
funds sold app. 6,000 contracts on the day.

Overnight, we saw very choppy markets with the corn opening lower, only to
rally to 7-8 cents higher and sell off again.  The corn market is a follower
and it will look to other markets, including outside market for direction.
The market should be finding buyers with the acreage numbers, but an overall
market sell off in all markets is hitting the grain markets and there is
nothing we can do about it.  The traditional way of doing business for the
farmer is gone because the big gain companies, ADM, Cargill, Bunge,
Andersons, have said they won’t buy grain from farmers more than 60 days out
and if you do sell them grain, they make the basis so wide it hurts.  This
puts all the risk back on the farmer.  Corn should open lower in-line with
last night activity, but from there it is anybody’s guess.  Remember, this
is a shortened week because of the Good Friday holiday on Friday and all the
markets are closed.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCH8                545^4S  -14^2                 563^4    541^4

ZCK8                556^2    -3^0                  567^2    554^0

ZCN8                568^4    -2^6                  579^2    566^4

ZCU8                569^0    -4^2                  578^4    568^6

ZCZ8                 571^4    -3^4                  583^2    570^2

Early Opening Calls: 3-5 lower

Top News

-- US Corn acreage is forecast at 87.5 mln acres down from Jan forecast of
90 mln acres, acc. to Informa report

-- Egyptian Corn imports for the 08/09 MY are expected at 4.1 mln mt, just
less than the 4.22 mln mt imported last year, acc. to USDA Ag Attaché to
Egypt.

-- Some analysts expect Japan to finally import cheaper priced GMO Corn for
food use as local grocers & consumers don't want to see higher prices passed
to them & food producers would like to maintain margins.

-- China's gov't has instructed its grain reserve arm, Sinograin, to buy 4
mln mt of Corn in hopes of supporting production & prices in 4 major growing
provinces.

-- CBOT March Corn Delivery Data: 172 total

-- Dalian Corn futures were off 5 Yuan to 1,811 Yuan/mt in overnight trade
($1=7.08 Yuan)

-- Globex Corn Vol: 205,946; Pit Vol.: 20,408; Open Interest change: +307

-- Weather: 6-10 Day Forecast: Below Normal Temps. Normal to Below Precip.
The Corn Belt will see rain and thunderstorms today and Tuesday. Wednesday
and Thursday look dry. Friday will see a return of showers. Temps normal to
below.

-- Outside markets: Energy Complex -1.14 at $109.07; Gold & Silver: +11.5 at
$1011.4 & +0.496 at $21.100; US $ is slightly better vs. Euro & is better
vs. Yen

Cash Markets

-- CIF Corn up 1 - 4. Mar. +34 to +38, Apr. +35 to +40, May +41 to +44, June
+35 to +39, July +39 to +41, Oct. +39 to +45, Nov. +40 to +46.

TREND:

Wheat charts certainly look like a big double top and leaving trade today in
a spill over response looks ominous. If it takes out last weeks lows early
next week could put in a top. Needs a close under 10.80 or more properly
1-.50 to confirm a top. Will have selling on rallies now against the highs
made this week. Spreads are acting more like they should with the strong KC
and weak carries in Chi.

The corn trade still has not made a bad trade. Will still be supported on
weakness and the story in new crop acres has the potential to propel this
trade into new highs again.



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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