Linn Group Morning Corn Comment

CHICAGO - Apr 14/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower on Friday as traders took profit and the weather
forecast points to better drying conditions next week and a better
opportunity to get some corn planted.  The May and July closed 10 cent
slower and the December was 7 cents lower.  Traders have been waiting to
sell corn as historically, corn goes lower this time of the year as corn
starts to get planted and So. America is completing harvest.  The weather
forecasters have been talking about net drying this week and a better
opportunity for field work and the market believes it, traders said there
was profit taking into the weekend.  The outside markets were also lower
helping pull the grain markets lower.  With the release of the USDA report
showing a small corn acreage number, farmers had hoped to get into the
fields early to maximize yields, but it hasn't happed yet.  The current
forecast has most of the Midwest warmer and drier this week, helping farmers
get into the fields, but rain is supposed to start again the end of the
week, slowing everything down again.  Friday's volume was pretty good at
just over 300,000 contracts and funds were net sellers of 6,000+ contracts
at the end of the day.

Overnight, the corn market had a wide trading range before closing a couple
higher.  The corn market opened much higher, 8 cents in the July, but sold
off by 8pm and was 4 lower before recovering and trading 1-2 higher most of
the session.  The market did rally back up to 6 higher in the middle of the
night before closing a couple higher.  This type of market action in the
middle of April shows just how volatile the corn market is with the lower
planted acres, low stocks, and strong demand.  Traders also pointed to the
US$ as part of the reason in the movement in corn overnight.  The US$ opened
very strong, after the grains opened and that may have contributed to sell
off in the grains around 8pm, but the US$ backed off and is actually lower
this morning.  Don't discount the US$ impact on grain prices because it is
at/or near record levels, making US exports to other countries and may have
countries jumping at buying US grains if they feel the US$ is going to
recover.  This afternoon will be the 1st crop progress for corn this year
and traders are looking for 3-5% planted.  Last year, corn planting went
from 4% on April 15th to 92% on May 20th with the biggest percentage (55%)
from April 29th to May 13th.  A small corn planting number today won't
surprise anybody, but we need to continue to see improvement in these number
every week.  The corn market is called to open 3-5 higher and it will look
for direction.  The weather forecast this morning hasn't changed a lot from
Friday, but rain events across most of the Midwest later this week and cool
weather will stop planting/field work.  There is still plenty of time to
plant corn, but with the strong demand and low stocks will keep everyone on
edge.

 Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                586^2    2^0                   594^6    579^2

ZCN8                599^4    2^0                   608^0    592^4

ZCU8                607^6    2^2                   615^4    601^4

ZCZ8                 610^4    6^4                   615^2    602^0

ZCH9                622^4    7^6                   625^0    613^0

Early Opening Calls: 3-6 cents better

Top News

-- A second meeting between Argentine farmers & gov't officials are set for
Monday. At the conclusion of Friday's meeting both parties said talks were
optimistic

-- 64,000 mt of US/S American Corn sought in buy tender from a pool of
Israeli buyers, also 16,000 mt of US sorghum was being sought, deadline for
submission of bids is Apr 16th

-- China's NGOIC estimated 2008 Corn production at 149 mln mt a rise of 0.7%
from the prior crop year.  They noted a better yield would offset a decline
in production acres

-- Turkey grain board announced that it indeed purchase 100,000 mt of mill
Wheat in a tender that closed last Thursday.

-- CFTC's Corn COT report showed funds Long 243,336 up 31,791

-- Apr 15 is deadline to submit bids in a 100,000 mt Barley tender floated
by Jordan. Delivery for 50k mt is expected in FH May & the balance in LH May

-- Dalian Corn futures settled higher.  Jan futures were 18 higher settling
at 1,927 Yuan/mt ($1=7.00 Yuan)

-- Globex Corn Vol: 248,493; Pit Vol.: 46,900; Open Interest change: -1,298

-- Weather: 6-10 Day Forecast: Normal to Above Temps. Above Normal Precip.
The Corn Belt will be dry today into Thursday. Friday may see some light
scattered showers. Chance of showers Saturday also. Temps normal to above.

-- Outside markets: Energy Complex +0.60 at $110.74; Gold & Silver: -7.6 at
$916.6 & -0.030 at $17.664; US $ is down slightly vs. Yen & is down vs. Euro

Cash Markets

-- CIF Corn steady up 3. Apr. +36 to +40, May +38 to +41, June +34 to +36,
July +37 to +41, Oct. +40 to +45, Nov. +41 to +45, Dec. +43 to +48

TREND:

G7 meeting this weekend---they have promised to attack the problem of
spiraling food inflation. Much of the blame being placed on the trading
public and funds. However, the one action they can address is the value of
the currency. Take note that any consolidated intervention over the weekend
could lead to weaker commodity prices in the near future.

Wheat is close to breaking down ---watch for a quick move to 8.30 to 8.00 on
Chi front month when it happens.

Corn will see lot of support on a trade down only 4 to 5 cents. Any stab
lower will not last long but in a move of liquidation could see better
buying opportunities. Users must have the summer covered on this break or
risk the potential of a weather market that shuts them out of business?



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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