Linn Group Morning Corn Comment

CHICAGO - Apr 2/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market rallied up near the highs set on Monday as traders pointed
to fund buying as corn tries to buy acres from beans after the release of
the USDA report.  Traders also are looking at the cold, wet weather that is
forecast for the coming weeks with flooding already happening in the south
and parts of the Delta.  On top of the fund buying in corn, the market had
some spillover buying as the market saw new crop beans rally up almost 60
cents.  The weather conditions and forecasts take center stage now that we
are past the USDA report and with the already high prices and short
supplies, the US and the world can't have a disruption in planting and a
reduction in corn acres.  As one trader said, it is a bad situation right
now, the market needs to buy corn acres and we have very wet weather and
planting delays.  Volume remains very strong at over 300,000 contracts and
funds were buyers of 5,000+ contracts.

Overnight, the corn market continued the rally from yesterday as now traders
want to talk about corn needing to go to $6.50 - $7.00 to get farmers to
switch from beans to corn.  We are starting to hear about some switching
going on, but with the high price of fertilizer and the need for crop
rotation this year after a couple of years of back to back corn, it could be
difficult to get farmers to switch.  Today could be an important day for
corn as it should open higher in-line with the night session, 3-5 higher,
and it the market will want to hold those gains.  Corn could become the
leader of the grain complex, especially if we mix in some weather problems
as the forecast remains cold and wet for the foreseeable future.  The market
should open higher today and look for direction.  Traders will be watching
the weather forecasts all day.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                589^2    5^2                   589^6    582^0

ZCN8                602^2    4^2                   602^4    595^0

ZCU8                602^0    3^4                   602^0    595^4

ZCZ8                 597^4    4^4                   598^0    590^4

ZCH9                604^4    5^0                   604^4    597^6

Early Opening Calls: 3-5 cents better

Top News

-- Argentine newspaper reports the 4 major farm groups on strike have agreed
to suspend its strike activities for 20-30 days while negotiations take
place.

-- In effort to keep supplies local, China's gov't imposed export duties of
30% on potassium & calcium/phosphate based fertilizers until the end of the
year.

-- Exports of ethanol from Brazil during March were only 278.8 mln L, down
from February's 365 mln L, acc. to the country's trade ministry.

-- 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.

-- CFTC industry roundtable scheduled for Apr 22 to discuss recent events
concerning Agricultural markets.

-- Dalian Corn futures for Sept delivery rose 7 to 1,775 Yuan/mt ($1=7.01
Yuan)

-- Globex Corn Vol: 270,719; Pit Vol.: 44,906; Open Interest change: +5,222

-- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to Above
Precip. The Corn Belt looks mostly dry today. Showers return late Thursday
into Friday. Saturday and Sunday look dry. Temps normal to below.

-- Outside markets: Energy Complex +0.40 at $101.38; Gold & Silver: +3.3 at
$886.0 & -0.009 at $16.899; US $ is slightly better vs. Yen & is steady,
easier vs. Euro

Cash Markets

-- CIF Corn steady off 3. Apr. +37 to +43, May +40 to +45, June +35 to +42,
July +40 to +44, Oct. +40 to +45, Nov. +40 to +44, Dec. +43 to +48

TREND:

True to form the wheat market has developed a very negative flat price bias.
When it starts it is hard to slow and it tends to go further than expected.
Corrections will be small until the primary move is completed. The Chi May
wheat chart is shown with the major support levels indicated.

The day started with a major fund house recommending buying 1 SX and selling
2 CZ. Based on the fact that some felt the corn had bot back some of the
bean acres? They do not understand the insurance program?

Dec corn was weak due to this spreading along with continued bull spreading
in corn as well. Similar situation in beans with the bear spreading support
SX while the spot contract garnered most of the selling. Both spreads should
continue in this manner

Flat price corn is on a tirade and sees shortages to deal with. Not sure
where it stops but 6.20 on a front month appears easy?



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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