Linn Group Morning Corn Comment

CHICAGO - Mar 18/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed limit down in almost all months on Monday as we
continue to see mass liquidation in all commodities, especially the grain
markets.  Traders said we are seeing general sell off in commodities as well
as speculative selling in the grain markets.  Speculators and funds looked
to reduce risk in these uncertain markets by reducing risk and cutting
positions to more manageable levels.  After the Bear Stearns deal, traders
seemed to worry about firms with rumors circulating that one of the biggest
commodity clearing firms was in trouble as its stock dropped almost 65%
yesterday.  Some big players in the financial industry are having to
liquidate commodity positions to help pay for their exposure to the credit
markets.  Traders also pointed to outside markets as helping to push corn
lower, especially crude oil selling off over $6.00 at one point and closing
$4.50 lower.  Really traders are pointing to money management instead of
fundamentals as the reason for the sell off.  Volume and fund selling was
limited because of the limit down move with fund selling only 7,000
contracts.  Options were where all the volume was taking place and corn
closed down synthetically another 10 cents.

The corn market sold off overnight as expected as synthetically the corn
market was another 10 cents lower after Monday’s limit down close.  The May
and July contracts closed about 4 cents lower and the December contract
closed 5 ½ lower.  The fundamentals haven’t changed in the commodity
markets, but right now, we are in a money management situation where funds
are having to raise cash and save equity by liquidating commodity positions.
Remember, commodity positions can be liquidated and you can have access to
those funds for the next day.  The corn market is being supported compared
to the soy complex because of the strong demand and the weaker US$.  Exports
remains strong and weekly import inspections were stronger than expected
yesterday.  The corn market is caught in the down draft of the commodity
selling and there isn’t any bullish fundamental news that can stop this
drop.  Until the fund and speculation liquidation is over, the corn market
will continue to follow the other markets lower.  The USDA report released
on March 31st is expected to show a big drop in corn acres planted this
spring here in the US and we are continuing to hear stories to support this
drop in acres and increase in bean acres.  Maybe too much of a switch and we
take care of the soybean shortage in 1 year, just like we did with corn last
year.  Corn should open in-line with the overnight closes and then look for
support.  There should be some underlying support in corn today.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                535^0    -4^2                  539^0    528^0

ZCN8                547^2    -4^0                  551^2    540^4

ZCU8                549^6    -3^4                  550^4    542^2

ZCZ8                 549^4    -5^4                  553^6    541^4

ZCH9                552^0    -11^0                 561^0    552^0

Early Opening Calls: 3-5 cents down

Top News

-- Monday's Weekly Corn Inspections: 48.821 mln bu; expected 42.5 mln bu

-- 40% of Texas corn crop planted up from 39% in same week year ago. 3% has
emerged down from the 7% seen same week year ago. Corn planting continued in
South Central, while planting was delayed due to wet fields in the
Blacklands and North East Texas.

-- Oklahoma Corn seedbed preparation was at 45%, 13 points ahead of normal,
and a small portion of the State’s acreage had been planted by week’s end.

-- Georgia Corn plantings were 7% in latest week up from 2% pace last week,
but behind the 20% pace year ago; 1% of the corn crop had emerged, but was
behind the 5% pace last year.  Corn was 1% vp-poor; 42% fair; 57%
good-excellent.

-- CME Group announced it will offer electronically traded options on
futures contracts in Corn, Soybeans, Soymeal, Soyoil, Wheat, Oats, & Rough
Rice side by side during day-time open outcry trading hours beginning April
14, 2008.

-- Dalian Sept Corn futures were 50 Yuan lower at 1,761 on 1.57 mln
contracts trading overnight. Other months were lower also.

-- Globex Corn Vol: 103,905; Pit Vol.: 15,802; Open Interest change: -4,235

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Below
Precip. The Corn Belt will see rain, snow and thunderstorms today ending in
the east Wednesday. Thursday looks dry. Friday will see light showers
return.

-- Outside markets: Energy Complex +2.61 $108.29; Gold & Silver: +9.3 at
$1012.3 & +0.209 at $20.495; US $ is better vs. Yen & is lower vs. Euro

Cash Markets

-- CIF Corn steady up 3. Mar. +37 to +40, Apr. +35 to +41, May +40 to +44,
June +35 to +40, July +40 to +42, Oct. +39 to +46, Nov. +40 to +46.

TREND:

The sell off today was wide and deep. All commodities but gold were
involved. Energy market was very severe with Nat Gas moving over 10 pct in
one day.  Cotton, Sugar, Grains and Meats---nothing was ignored. Markets are
very oversold in general tonight but suspect the selling continues. This is
not your general technical selling but takes on a panic get me out type of
trade.

Corn has less of a technical reason to sell off further. The bean complex
below is more compelling. Look for corn to be supported on small weakness
tomorrow.



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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