Linn Group Morning Corn Comment

CHICAGO - May 5/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly lower on profit taking in front of the
weekend amid uncertain weather forecasts, the crop progress report released
on Monday after the close and high corn prices.  The weather and weather
forecasts call for continued rains, but there seemed to be enough wide
spread breaks, that corn planting is getting done, just not at a good pace.
This uncertainty of exactly how much corn was planted last week was reason
enough for some traders to take profit before the weekend.  The USDA will
release the crop progress report later today after the close and with the
weekend rain, many areas didn't get much corn planted over the weekend.
Analysts estimating between 25-35% of the corn planted behind 53% last year
and 63% 5yr average.  The backlash against ethanol is weighing on the corn
market as it seems every politician is using ethanol as the whipping boy as
to why food prices are higher.  The bottom line is that corn is going to go
to the last minute on getting acres planted.  The corn market remains choppy
as traders are nervous about buying corn up at these price levels and they
are afraid to sell corn because of the uncertainty of getting the corn
planted.  Volume was average on Friday about 235,000 contracts and funds
sold 2,000 contracts.

Overnight, corn was lower as there was about good corn planting last week
even though the rains shut out many farmers over the weekend.  As we have
mentioned, there was farmers are getting corn in the ground, it is just
going a lot slower than usual.  Corn planting is way behind normal, but
everybody keeps reminding the market that they can plant a lot of corn in
little time with today's technology.  USDA announced new corn exports this
morning of 278,000 tones to Japan and unknown destinations.  The lower corn
market overnight had some traders wanting to talk about a bigger progress
number this afternoon.  The wet/cool weather has delayed planting and
forecasts this week are not good for rapid planting, but some traders think
we could get a higher than expected planting progress number this afternoon.
In talking to traders, the corn market is choppy and should remain so until
the crop gets into the ground.  The corn market should open lower today and
then look for direction, but will probably be choppy unless new news hits
the market.  Crude oil is up today over $2.00 which will lend some support.
The overall ethanol bashing is taking its toll on the corn market as some
funds are exiting positions in case the government caves into pressure and
steps in to satisfy the calls for change.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                598^4    -3^4                  606^4    592^2

ZCN8                610^4    -3^0                  618^6    605^0

ZCU8                619^4    -3^6                  628^0    615^0

ZCZ8                 627^6    -1^6                  635^0    622^0

ZCH9                640^0    0^2                   645^0    633^0

Early Opening Calls: 2-3 cents lower

Top News

-- Argentine grain exchange on Friday reported Corn harvest as slow.  They
estimated 59% had been harvested up 6% from the week before & ahead of year
ago pace of 55% complete.  They estimated nationwide yields at 7.4 mt/ha.

-- Minnesota ethanol project delayed due to permit delays, acc. to ethanol
producer Poet

-- 100,000 mt of barley tender was issued by Jordan's state grain buying arm
on Monday, the bid deadline is May 20th.  50,000 mt are expected for LH June
& the other 50k mt are expected in FH July

-- 16,000 mt European Feed Barley tender issued by Israeli group, with bid
deadline set for May 6th

-- CBOT Corn Deliveries: 380 thru 4/28/08 no stopper

-- Jan Corn futures on the Dalian Exchange rose 13 Yuan to settle at 1,976
Yuan/mt ($1=6.99 Yuan)

-- Globex Corn Vol: 201,684; Pit Vol.: 30,525; Open Interest change: - 8,513

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Above
Precip. The Corn Belt will be dry today. Tuesday into Thursday will see
chances of scattered showers. Friday into Sunday looks dry. Temps normal to
below.

-- Outside markets: Energy Complex -0.09 at $116.23; Gold & Silver: +11.8 at
$869.8 & +0.374 at $16.757; US $ is slightly lower vs. Yen & is trading
lower vs. Euro.

Cash Markets

-- CIF Corn steady. Apr. +19 to +23, May +23 to +26, June +32 to +35, July
+38 to +40, Oct. +43 to +45, Nov. +42 to +445 Dec. +44 to +47

TREND:

We chose to recalculate the upside counts on Jly corn this week. This new
chart is shown below. One can speculate that this market is in the process
of starting another major leg up in price that makes it difficult to be
short anything in the grain markets in general. The S&D is so tight that any
weather threat makes it untenable. I have thought that the weather threat
had to come in the summer. It is very unusual to see a wet spring enable
this type of trade. That may be why we have marked time for Apr which is
typically a negative time frame for corn prices.

We are already seeing some price resistance on the part of users at current
price levels. This has led to a lot of hand to mouth buying and liquidation
of herds in all feed sectors. If this corn chart breaks into new highs---and
it is looking very probable, the value of fed animals will tag along to keep
the supply chain at least viable. As one customer said last week, it will
cost a lot more to eat a steak later this summer.



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.