Linn Group Morning Corn Comment

CHICAGO - Apr 8/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market turned lower later in the day after opening higher, but the
pressure from a much lower wheat market, weather forecast for a drying
period for planting, and seasonal tendency to sell corn pushed corn lower.
The December contract actually made new all-time highs early in the session.
The wheat market seemed to lead the grain complex lower today closing down
over 50 cents and without any positive news, the corn market followed.  Corn
plantings in the south are lagging last year, but the big corn growing
states of Illinois and Iowa are just getting started with planting.  This is
the time of the year when corn sells off because the beginning of planting
season is getting in full swing so traders are conscious of that and may be
hesitant to buy corn unless the forecast changes and it remains cold/wet
across the corn belt.  Traders remain concerned about the cold/wet weather
forecast of the next week, but the latest 11-16 day forecast shows warmer
weather and a drying pattern, which coincides with prime corn planting.
Volume was pretty heavy, but 70% of the volume was spread activity as we
have funds rolling out of the May contract and the Goldman Roll started
yesterday.

Overnight, the corn market started lower and traded in a pretty tight range
1-2 lower to unchanged before moving 1-2 higher in the middle of the night
and closing unchanged, up slightly.  With no new news, the corn market will
look at weather forecasts, other markets, and seasonal tendencies for
direction.  The corn market right now is looking at every forecast and
trying to decide if the extended forecast are valid or if it is going to
change over the next week or so.  The big corn growing states of IL and IA
are approaching their big planting season in a couple of weeks and they need
to start working ground in anticipation and many areas are wet and still
cold, but better temps and drier weather are in the forecast.  The USDA
releases a supply/demand report tomorrow morning before the opening and
traders are expecting stocks to tighten with stocks at 1.303 bil bu. vs.
1.438 in the March Report.  The surprise would be a higher number than the
March report, but I would expect traders to immediately digest this
information and continue to watch the weather report.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                590^4    0^4                   592^0    586^4

ZCN8                603^2    0^0                   604^6    599^4

ZCU8                606^2    0^6                   607^0    602^2

ZCZ8                 603^4    0^0                   605^4    599^4

ZCH9                612^0    1^0                   612^0    608^0

Early Opening Calls: 1-2 cents better

Top News

-- Brazil's Ag Ministry ups its forecast for the 07/08 Corn crop to 56.2 mln
mt from its prior estimate of 55.3 mln mt

-- Texas Corn crop conditions were 12% vp to poor; 40% fair; 48%
good-excellent.

-- Analysts expect Wednesday's USDA Corn crop carryout at 1.30 bln bu. vs.
prior month 1.438

-- Monday's USDA Weekly Corn Inspections: 48.532 mln bu; expected 42.0 mln
bu

-- 300,000 mt of Corn will be allowed for zero tariff import by Turkey's
grain board, new reports say the government's cabinet gave permission for
the imports.

-- China's Ag ministry report shows recent precip in important growing
regions have improved spring planting conditions & also helping the winter
wheat crop

-- After Chinese hog farmers were given state support to help encourage
production, the gov't has broadened those subsidies to include poultry &
dairy farmers also & extended time hog farmers can receive help.  The
spending is aimed at encouraging production to help control food price
inflation.

-- Dalian Jan Corn futures fell 16 Yuan to 1,883 Yuan/mt ($1= 7.00 Yuan)

-- Globex Corn Vol: 237,147; Pit Vol.: 41,176; Open Interest change: +13,245

-- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to Above
Precip. The Corn Belt will see showers and thunderstorms move west to east
today ending in the far east early Wednesday. Thursday will see a few light
showers . Friday mostly dry. Temps normal to below.

-- Outside markets: Energy Complex -0.82 at $108.27; Gold & Silver: -0.3 at
$922.2 & -0.410 at $17.714; US $ is slightly better vs. Euro & is down
slightly vs. Yen

Cash Markets

-- CIF Corn steady off 1. Apr. +39 to +42, May +42 to +45, June +34 to +39,
July +38 to +42, Oct. +41 to +45, Nov. +41 to +46, Dec. +43 to +48

TREND:

My initial reaction to the crop condition ratings was that soft red wheat
was not as good as expected. Sunshine should improve the situation well but
for the initial reaction the Chi wheat should be slightly firmer. Soft white
conditions add to this initial reaction. Hard wheat conditions had been
expected to improve and they did some. Should keep this market from rallying
as well as Chi---want to sell a 20 cent rally in Chi so do not misinterpret
my comments. Corn needs to see a planting window develop---really hoping for
it. Does not show in the weather forecasts today so look for corn to firm
due to this?

Chi July wheat still has a date with $8.00 and may go all the way to 7.50
eventually. Depends on what corn does? Soft today but all I know is that
stocks have to be stretched and feeding wheat at some value close to corn is
needed? Stay tuned. Chi Jly wheat at 80 to 60 over corn is coming---is it
7.50 corn and 8.50 wheat or does whet go materially deeper?



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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