Linn Group Morning Corn Comment

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

The corn market pushed aside all the negative news in outside markets and
rallying near the end of the day and closing higher.  Almost all the other
commodity markets were lower yesterday, but the corn market showed that
traders are worried about corn planting delays and the ability of farmers to
get corn in the ground over the next week.  The July corn closed 5 cents
higher and the December closed 3 higher while soybeans were 30-40 cents
lower and wheat was over 10 cents lower.  Corn also came under pressure from
the weaker than expected export sales.  Corn showed it had fundamental
strength when the rest of the markets were reacting to negative press about
commodities in general and a stronger US$.  There is a lot of negative news
in the press on commodities right now.  Technicians want to talk about how
good corn looks and that helped with the rally late in the day yesterday.
Regardless of the news and the outside markets, the weather remains the main
feature for where corn prices are going.  A big spring storm covers most of
the Midwest this weekend and then the weather clears but another storm is
expected next weekend.  Weather models are currently very volatile and
predicting rain totals and coverage seems to be very tough.  In talking to
farmers across the Midwest, there are many areas where corn is getting
planted, but we will not come close to approaching the 5yr average when the
USDA releases planting progress report on Monday after the close.  Analysts
are expecting 25-30% vs. 5yr average of 59%.  Corn is getting planted, but
not in bunches and it seems to be very sporadic.  Volume was lighter than
the last couple of days, but sill over 250,000 contracts and funds sold
5,000+ contracts on the day.

Overnight, corn gave back all the gains from yesterday closing 3-5 cents
lower.  The corn market opened unchanged last night and traded in a tight
range before selling off late in the evening and then again right on the
close at 6am.  As we have mentioned in the past, at these levels, corn needs
positive news everyday to continue higher.  We are not going to kill the
corn crop this time of the year.  The corn will get planted, it will just be
late, some acres won’t get planted, and yields will probably suffer.  The
weather man remains the grain traders best friend and the current forecast
calls for rain, slowing planting.  Cooler temps that were forecast for next
week have risen, so that should help drying efforts and the rains forecast
will miss some areas helping to get corn planted.  Until the corn gets
planted, this will be all the market wants to talk about.  Crop progress
report will be talked about a lot the next 2 days and one analyst had an
interesting take when he mentioned that there are a lot of areas that
planted corn 1-2 weeks ago, but it has germinated or sprouted.  This corn is
counted as already have been planted, but it might as well have been planted
today, so maybe the planting progress numbers are actually worse than we
think.  Interesting concept and will be debated by many.  The corn market
should open lower today, look at the weather forecast and look for support.
The corn market seems to be very well supported lately, but corn needs a
reason to stay at these lofty levels or maybe these prices are lofty anymore
and these prices will be the norm.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                602^6    -2^6                  605^2    601^0

ZCN8                613^0    -4^2                  617^0    612^0

ZCU8                623^4    -3^2                  626^4    622^2

ZCZ8                 626^4    -5^0                  631^4    626^0

ZCH9                637^0    -4^2                  640^0    636^4

Early Opening Calls: 2 to 4c lower

Top News

-- Int'l food aid & development programs totaling $770 mln has been
requested by the White House in an effort to head off developing world
social unrest

-- After some progress in Argentine farm talks this week & more talks
arranged for next week, some farm groups say they won't halt highway
traffic, but instead will protest along side highways

-- 1.6 mln mt of Rice imports to Philippines have met near term domestic
demand needs.  Its May 5th tender will go towards increasing buffer stocks,
but the country's Ag minister said it would not accept all offers at that
tender.

-- CBOT May Corn Deliveries: 312

-- China's Dalian Exchange was closed overnight due to continued Labor Day
holiday

-- Globex Corn Vol: 228,442; Pit Vol.: 43,070; Open Interest change: + 1,486

-- Weather: Very little change to the general theme of weather was noted
overnight, frequent weather disturbances move through the nation’s
agricultural region resulting in slow field working conditions. Heavy rain
is still expected from Missouri to Minnesota today and from the northern
Delta to Michigan tonight and Saturday.

-- Outside markets: Energy Complex +0.65 at $113.17; Gold & Silver: +4.0 at
$854.3 & +0.017 at $16.128; US $ is trading better against both Yen & Euro.

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

May      +28/30 N           +22/25 N           -80/-70 N           +80/   N
390

Jun       +30/40 N           +31/35 N           -100/-85 N         +75/   N
410

Jly        +40/48 N           +38/40 N           -100/-95 N         +75/   N
420

Truck                Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago                       -15 K    -5 K     -100 K

Toledo              -29 N    -14 K    -50 K

Dec ILL            -18 N    -17 N                 -12 N              -150 N

TREND:

Wheat down side counts are not so far away. July wheat counts are 7.26 but I
feel shorts should be liquidated on a test of 7.50 and scale it on down.

Corn had a nice rebound trade today. The stage was set after today’s weaker
than expected open to fail, and we were able to find support just above 6.00
and rebound despite beans, meal and oil all trading limit down. A close
above the April highs of 6.28 ¼ would suggest another 40 cent rally. The Dec
actually had a new high close for the move, however still six cents off the
highs from Tuesday.



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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