Linn Group Morning Corn Comment

CHICAGO - May 1/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market rallied on Wednesday after we saw the reversal sell off on
Tuesday as traders seemed to be worried about the continued cold/wet
forecast lasting through next week delaying planting even further.  The July
and December contracts both closed up near the highs of the day up 6-7 cents
after a relatively quiet day of trading.  Weather remains the key issue for
farmers as they are trying to plant corn, but seem to have to look for
fields that are fit to plant.  Traders pointed to fund liquidation on
Tuesday and the market responded higher after the selling disappeared.
Weather remains the focus and it looks like it could be a tough year to get
corn in the ground after a couple of years of easy going for the farmer.
With increased technology, farmers can plant a lot more acres today than
they could in the past, but they still need the weather to cooperate.
Traders also starting to talk about the US are not going to be able to plant
more than the 86 mil acres the USDA forecast back in March.  After the USDA
released their acreage estimate, the general consensus was that more acres
would be planted, but that is probably not possible now.  Also, traders
talking about a reduction in the national yield average as we get farther
and farther behind in acres planted.  If both of these things happen,
everybody will have to really look at their supply/demand tables again.
Volume was moderate at a 309,000 contracts and funds were net buyers of
7,000 contracts.

Overnight, the corn market was higher again as the weather forecast
continues to show cold/wet weather for the next week or so and the demand
for corn remains strong.  Weekly export sales were released this morning, a
little weaker than expected.  Trade estimates were between 650,000 and
900,00 and actual sales were 596,000.  This number is a little
disappointing, but still a strong number considering the high price of corn.
Traders will probably forget about the export sales this morning after the
1st couple of minutes trading.  Traders will have some windows to plant corn
over the next week, but the windows will be small for most areas.  Farmers
that I have been talking to that are planting continue to talk about having
to search for fields that they just can't "go" and plant anywhere they want.
Just having to move around to plant is taking more time than normal, but
they are getting corn in the ground.  The outside markets are under pressure
this morning and with the lack of new news, that may put some pressure on
the grain markets, but the weather should keep them from a general sell off.
Gold, silver and crude were all much higher early last night but by this
morning all were lower and making new lows.  The US$ is up making new highs
this morning after failing yesterday after the Fed rate announcement.
Regardless of what the mainstream press is saying about blaming ethanol for
the high grain prices, a weaker US$ is just as much to blame as the huge
increase in demand.  The opening calls will be higher this morning in-line
with the close overnight, but with the weaker outside markets and stronger
dollar, grains could come under pressure today, especially if the weather
premium is already built into the price.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                606^2    6^0                   606^4    602^0

ZCN8                616^2    4^0                   618^6    613^6

ZCU8                627^0    5^2                   628^4    622^0

ZCZ8                 632^4    4^2                   634^6    629^4

ZCH9                643^0    7^6                   643^0    636^4

Early Opening Calls: 3-5 cents better

Top News

**USDA Corn 07/08 Export Sales Net: 551,200 mt; 08/09 Net: 44,800 mt;
expected 650-900k mt

-- Turkey announced total purchase of 150,000 mt of Corn on Thursday in a
tender that concluded on Wednesday.  They noted they bought 2 tranches:
25,000 mt of Opt US/Canadian Wheat & another 125,000 mt of Argentine Wheat
for delivery in May.  Traders said prices were 235-236/mt of Argentine
origin & $344/mt in the 25,000 mt tranche.

-- Total of 110,000 mt of Barley for feed was purchased by Iran's state
grain feed import ministry.  Traders say 2 shipments of 55k were for May.

-- End of sharply higher commodity price rises is looming, price increase
will likely moderate, acc. to Kellogg's CEO.  The chief also said nearly 80%
of its 2008 commodity costs are hedged.

-- Chief UN humanitarian official says near term symptoms of worldwide food
shortages are more likely to cause malnutrition than famine conditions.  He
says the agency is putting together figures to help combat the upcoming
shortages.

-- Thai private rice exporters, lacking gov't endorsement, will not submit
tenders in the 675,000 mt Philippine May 5th tender. Conditions of the
Philippines tender says suppliers must be agency of gov't or private
exporters must officially endorsed by gov't

-- Dalian Soybean & Corn futures market were inactive overnight due to May
Day/Labor holiday

-- Globex Corn Vol: 259,347; Pit Vol.: 41,817; Open Interest change: -
16,943

-- Weather: Two storm systems are still set to plague the U.S Midwest over
the coming week. Storm number one occurs today into Saturday. Storm number
two comes out of the southwestern states and moves through the heart of hard
red wheat country Monday through Wednesday.

-- Outside markets: Energy Complex -0.41 at $113.05; Gold & Silver: -7.8 at
$857.3 & -0.124 at $16.365; US $ is slightly lower vs. Yen & is trading
slightly better vs. Euro.

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

Apr       +28/31 K           +31/33 K              -5/+5 K
410

May      +28/31 K           +34/35 K           -80/-60 N           +75/   N
410

Jun       +35/40 N           +33/35 N           -100/-85 N         +75/   N
420

Jly        +43/48 N           +38/40 N           -100/-85 N

Truck                Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago                       -15 K    -5 K     -100 K

Toledo              -29 N    -16 K    -50 K

Dec ILL            -18 N    -6 K                  -12 N              -150 N

TREND:

No pizzazz to wheat. Even with the rally in corn and beans this market
stayed under pressure.

Corn seems to have 9 lives. Bend but not break is the pattern. We could see
heavier long liquidation coming but the market always seems able to bounce
off these corrections.

Bothered by the 30 day maps above. We will get the corn planted---but
putting seed into wet ground is not the best for yields---and the compaction
makes yield drag that last for more than one year.

Ethanol margins remain under pressure but have not fallen out of bed. They
remain well above the l3vels of last fall and are not sufficient to shut
down production---we are growing the crush rate at well above 8 mil bu per
day now.



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/

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.