Linn Group Morning Corn Comment

CHICAGO - May 14/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market sold off aggressively on Tuesday as it seemed traders wanted
to make a run at corn and get it out of the way??  There continues to be
talk of better planting weather and the corn market is not getting any
bullish news.  The forecast for better weather is taking some of the risk
out of corn prices.  Traders see better weather this week as allowing
farmers to really catch up, as one trader said, if we caught up 24% last
week, we can probably catch up 30% this week which will take the risk
premium out of the corn market.  The July and December corn closed about 7
lower, but well off the lows made early in the session when most of the corn
contracts were down over 20 cents.  Traders said the initial selling
pressure was probably too aggressive, but on the other hand, corn needs some
new positive news to get up and going again, especially this time of the
year.  The outside markets were mixed with the crude oil up $1.50, but the
US$ was stronger.  Volume was moderate at app. 270,000 contracts and funds
sold 9,000 contracts.

Overnight, corn was lower again as traders are still looking at the better
crop planting weather forecast this week and weekend allowing farmers to
catch up significantly, especially in the western corn belt.  The July and
December were both down 4 cents on the lows at the end of the session as
corn traded unchanged to negative all night.  The corn market is under
pressure because of the better weather forecast and that is taking the risk
premium out of the corn market.  Most traders will tell you they are bullish
corn medium to long term, but short term, it could find face some pressure.
The bulls want to talk about farmers having to switch to shorter maturity
corn which has a 10-20 lower yield average because the corn is going in so
late and bears want to talk about yields not necessarily being lower because
corn was planted late, yields are determined later in the summer, so it has
plenty of time to recover and the weather may be fine in 2 months.  Who is
right?  Weather and the ending stocks report from last week are what is
leading corn right now and corn should have trouble moving higher unless we
get a piece of good news, such as a lower crop progress report on Monday
afternoon.  Weekly export sales will be released tomorrow morning, but these
have been largely ignored by the market lately.  The weekly export sales
have been weaker at these prices and it looks to continue right now.
Opening calls will be 3-5 lower and the corn market will look for support
and to see if funds try and go after the lows from yesterday.

Globex Overnight

Contract            Last      Net Change       High      Low

ZCK8                596^6    -0^6                  598^0    596^6

ZCN8                603^2    -4^0                  607^6    603^0

ZCU8                615^6    -3^6                  619^6    615^6

ZCZ8                 627^0    -4^0                  631^2    627^0

ZCH9                642^0    -0^4                  643^0    641^2

Early Opening Calls: off 2-4 cents

Top News

-- Analysts expect the French grain stats office, ONIGC, to lower its Corn
ending stocks to 2.97 mln mt

-- Group in Israel seeking 48,000 mt of US or S American Corn at Wednesday
tender, shipment was expected in August

-- Forecast output of Corn by China's Nat'l grain stats center was unchanged
from last estimate of 149 mln mt

-- After passing EU food safety muster, the Euro Commission will vote
whether to lift the ban on US poultry imports on May 28th.  US poultry
official says the industry hopes for a positive vote & if so expects exports
to EU to resume by October 2008

-- 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

-- Turkish media is reporting that its state grain board has said it will
soon tender for import of 150,000 mt of Corn.

-- Dalian Corn futures settled lower in overnight trade, down 11 to 1,958
Yuan/mt, traders suggest hard earthquake hit pork breeding/production areas
could result in lower feed demand

-- Globex Corn Vol: 236,811; Pit Vol.: 29,049; Open Interest change: -
12,502

-- Weather: 6-10 Day Forecast: Below Normal Temps. Below Normal Precip. The
far eastern Corn Belt will see some showers and thunderstorms today.
Southern and eastern areas see chances of showers Thursday. Friday into
Monday looks dry. Temps normal to below.

-- Outside markets: Energy Complex -0.39 at $125.41; Gold & Silver: -1. at
$868.3 & +0.040 at $16.868; US $ is trading slightly better vs. Euro & is
better vs. Yen.

Cash Markets

-- CIF Corn up 1 to 6. May +16 to +20, June +24 to +27, July +34 to +37,
Aug. +35 to +39, Sept. +37 to +43,Oct. +39 to +43, Nov. +39 to +43, Dec. +42
to +46

TREND:

Corn into support and no reason to press the short side. Encouraged users to
add to length today.

Wheat is still flirting with a break into new lows under the 7.90 lows in
Jly. Market already short here so do not expect any major promise when this
market moves into new lows---corn should continue to gain on wheat in spite
of short term signals that the spread is tired.



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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