Linn Group Morning Corn Comment

CHICAGO - May 12/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed mixed on Friday as the July contract was 1 lower and
the December closed 3 ¾ higher.  Some traders looked at the USDA report as
bearish because of the increase in 07/08 stocks from the April estimate and
bullish for 08/09 because of the estimate for ending stocks.  As one trader
said, the USDA had to work the numbers so that the ending stocks were not
too low to create panic in the marketplace.  The 08/09 stocks number assumes
reduction in feeding and exports, but doesn’t take into account the wet
spring and the probably reduction in yields and possibly acres if the rain
continues.  After the market digested the USDA numbers, it continued to
focus on the weather patterns and the current forecast remains cold/wet for
most of the Midwest.  The bottom line for the corn market right now is the
weather and getting the corn planted.  The corn market was also supported by
the surging crude oil market as it new highs along with the new highs hit in
the corn market on Thursday night.  Volume was good at almost 300,000 and
funds were net buyers of 2,000+ contracts by the end of the day.

Overnight, the corn market closed slightly higher after being down 5-6 cents
early in the session.  Rain fell across most of the Midwest over the weekend
with some areas receiving 2+ inches.  I know I dumped 2.5 inches from my
rain gauge last night.  The market will be choppy today as we wait for the
USDA to release planting progress report today after the close.  I am
hearing of estimates from 45-55% completed vs. 27% last week and 77% 5yr
average.  Corn planting is still way behind and based on the precipitation
maps I saw this morning, I doubt there was much planting done over the week
in many areas.  Nothing has really changed for the corn market as planting
is behind and not expected to gain any big momentum this week as the
forecast remains cold/wet this week.  Corn may be hard to extend here at
these levels because it is almost impossible to kill corn this time of the
year, but with the lows stocks and the continued demand from different
areas, the market is very nervous about getting the corn in the ground.  The
corn market should open unchanged, 1-3 higher and then look for market
direction.  The crude oil market is lower this morning, but the soybean
market is still strong and will help support the corn market.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                618^6    0^2                   618^6    614^0

ZCN8                631^0    1^6                   631^4    623^4

ZCU8                642^2    1^2                   642^2    637^2

ZCZ8                 652^0    2^0                   652^4    644^4

ZCH9                663^2    2^2                   663^2    655^6

Early Opening Calls: 2-3 cents better

Top News

-- USDA Corn progress report likely to show plantings are 45-55% complete.
The report will be released this afternoon.

-- Tensions between farmers & Argentine gov't prompt Buenos Aires Grains
Exchange to lower estimated planting area by 8% to 5 mln ha in the 08/09
crop year, down from the 5.4 mln ha

-- Russia's ag ministry estimates 49% of spring Grain plantings are
complete, bringing the total to nearly 15 mln ha.  This year's plantings are
3.7 mln ha ahead of last year's pace

-- Turkey last week said its state grain board has said it will "soon"
tender for import of 150,000 mt of Corn.

-- CBOT May Corn Delivery: 499

-- Dalian Corn futures were modestly higher in overnight trade, up 4 Yuan to
settle at 1,983 Yuan/mt

-- Globex Corn Vol: 259,848; Pit Vol.: 31,965; Open Interest change: + 1,055

-- Weather: 6-10 Day Forecast: Below Normal Temps. Normal to Above Precip.
The Corn Belt will be mostly dry today and Tuesday. Wednesday and Thursday
will see scattered showers and thunderstorms. Friday and Saturday look dry.
Temps normal to below.

-- Outside markets: Energy Complex -1.52 at $124.44; Gold & Silver: -3.9 at
$882.0 & +0.046 at $16.930; US $ is trading slightly better vs. Euro & is
better vs. Yen.

Cash Markets

-- CIF Corn steady . May +12 to +18, June +23 to +26, July +34 to +37, Oct.
+38 to +41, Nov. +39 to +43 Dec. +42 to +47

TREND:

The wheat/corn spreads traded into new lows for a moment today but bounced
some in the close as wheat rallied back. Still not willing to press wheat
below 7.50 even though it could trade there. The spread to the right should
remain weak---but to take this into corn premium has to be led  by stronger
corn prices.



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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