Linn Group Morning Corn Comment

CHICAGO - Apr 15/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market rallied on the back of speculative buying as
traders/farmers/speculators are worried about the corn getting in the
ground.  The May and July contracts both closed about 7 cents higher and the
December contract was over 9 cents higher.  The cold/wet forecast continues
with a window for planting this week, but the rain returning by the weekend
across most of the Midwest.  As one trader said, even though we have plenty
of time to plant corn, there is still a very real possibility that the delay
will reduce acres when there is no room for reduction.  Also, as we continue
to delay planting corn, it pushes the pollination stage back later in the
summer when the hot weather could cause damage.  The demand remains very
strong for corn and somebody is going to have to give in, whether or not it
is the feed, export, or ethanol guys.  Exporters were busy again over the
weekend with the USDA announcing sales to So. Korea for another 216,000
tones of corn, 166,000 for 07/08 and 50,000 for 08/09.  Food costs seemed to
be on the front page of most major newspapers over the weekend blaming
higher food prices and everything else wrong with the world on
ethanol/biodiesel.  Volume was strong, over 300,000 contracts and funds were
net buyers of 5,000 contracts.

Overnight, corn remained stronger as the weather forecasters are calling for
more rain across most of the Midwest that will continue to delay corn
plantings and the extended forecast doesn't look good either.  Also, the
USDA released the first corn crop progress report on Monday after the close
showing only 2% of the corn planted in the US vs. 4% last year and 5yr ave.
of 9%.  This number wasn't unexpected, but still a low number.
Traders/farmers are quick to point out though that will today's technology
and planters, farmers can plant a lot of corn in a short time period.  This
is just a start and traders will want to see improvement every week, but
until we get to May 1st, traders won't get really worried about the crop
progress reports.  Actual weather and forecasts will dominate the corn
market for the near future as traders try and decide if they are going to
believe extended forecasts calling for rain over the next 2 weeks, or if
they want to wait to actually see the rain falling.  Exports remain strong
and China remains in everybody's mind as there is more talk of China being a
corn importer in the next year or so.  The corn market should open higher
today and then look for direction.  The crude oil market is making new highs
this morning and that will lend support to corn and the export activity over
the weekend is showing the market that corn prices are NOT high enough to
curb demand yet.  It will probably be tough for corn to have a big rally
unless there is new news out in the marketplace, but set backs should be
well supported.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                597^4    5^6                   597^4    592^6

ZCN8                610^2    5^4                   610^4    605^6

ZCU8                617^2    5^0                   617^2    612^0

ZCZ8                 619^0    5^6                   619^0    614^0

ZCH9                625^4    3^0                   629^0    622^4

Early Opening Calls: 3-6 cents better

Top News

-- Only 50,000 mt of Barley was bought by Jordan's state grain arm in a
Tuesday tender.  The country had initially announced it was seeking 100,000
mt.  Traders say the price was $399.35/mt & for LH May delivery

-- Gerald Bange, chairman of the World Agricultural Outlook Board, said
China will become a net importer of 2 to 3 million tons of corn per year
over the next four or five years. He also said corn imports will not grow at
the same pace as soybeans.

-- USDA reported % Corn planted was 2% vs. 4% last year & 7% 5 yr avg.

-- On Monday USDA Weekly Corn Inspections: 45.405 mln bu; expected 42.5 mln
bu

-- On Monday USDA reported private sale of 116,000 mt Corn to Unknown
destination

-- On Monday USDA reported private sale of 100,000 mt Corn to S Korea
destination

-- Dalian Corn futures rose 12 Yuan in overnight trade to settle at 1,939
Yuan/mt basis the January contract

-- Globex Corn Vol: 248,493; Pit Vol.: 46,900; Open Interest change: - 1,052

-- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to Above
Precip. The Corn Belt looks dry today and Wednesday. Thursday into Saturday
will chances of see light scattered showers moving west to east. Sunday
looks dry. Temps normal to above.

-- Outside markets: Energy Complex +1.45 at $113.21; Gold & Silver: +2.4 at
$928.2 & +0.043 at $17.848; US $ is slightly better vs. Yen & is steady,
easier vs. Euro

Cash Markets

-- CIF Corn steady off 1. Apr. +35 to +37, May +40 to +41, June +34 to +35,
July +38 to +42, Oct. +40 to +45, Nov. +40 to +45, Dec. +43 to +48

TREND:

Wheat condition reports were about as expected. But unless there is
something that surfaces in major demand, this market has down side
potential. It is the short leg of most inter-market spreads already. But
look for sell stops below when today's lows come out. Will see if we can
follow through this time? If we do, 8.50 is the next down side target. Mpls
weakness was a key today as the cash weakness in that market takes over
leadership?

Corn is just the opposite. I have downplayed the planting delays but the new
crop S&D for this market has so little room for error. It is not possible to
balance the supply with any loss of acres due to planting delays or to
yields based on pollination delayed into the heat of the summer on planting
delays in the southern corn acres. Suspect this market has a rationing job
to do immediately. Do not stand in front of the rally that follows. 6.20 to
6.30 is the target for the front month.



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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