Linn Group Morning Corn Comment

CHICAGO - May 15/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower on Wednesday as it continued to receive pressure
from weather forecasts showing better planting conditions and pressure from
outside markets.  The July closed 11 cents lower and the December was over
10 cents lower with both closing right near the low of the day.  The corn
market felt pressure right from the beginning of the day but recovered in
the middle of the session only to sell off again toward the end of the day.
The current forecast has the western corn belt dry over the coming week and
eastern corn belt receiving scattered showers.  Corn also felt pressure from
the crude oil market as crude oil closed $1.50 lower yesterday.  Traders
also pointed to active bean/corn spreading as helping to pressure corn as
traders have been pushing that spread ever since the S&D report released
last Friday was disappointing for corn.  The volume was very small compared
to the last couple of weeks and funds sold 5,000 contracts by the end of the
session.

Overnight, the corn market continued lower as bulls are searching for any
news to help support the market.  Corn is finding some support from end
users that are using the recent break to price some needs, but the funds and
speculators are sending the corn lower.  Weekly export sales today at
686,500 were within the estimates of 400,000 to 700,000 but it will probably
be forgotten 3 minutes after the opening.  Weather is the dominate factor
for the corn market as we continue to have a forecast for warm/dry weather
in the WCB and cool/wet for the ECB.  The WCB will catch up in their corn
planting and make a lot of headway in planting soybeans.  Corn plantings are
still way behind, but they are catching up fast, especially in the WCB.  The
outside market will be supportive today with crude oil up over $2.00, but I
don't know how much traders are paying attention to the outside markets
right now.  The bottom line for corn is weather and liquidation in front of
better planting weather.  This is NORMAL for this time of the year, it is
just happening later than usual.  We won't get an accurate idea on acres
planted or yields for months and traders are guessing right now, with both
bulls and bears making valid arguments.  Corn should open lower this morning
and then look to try and find support, as we have seen fund liquidation the
last 3 days which may be enough.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCK8                589^6S  -7^6                  598^0    586^6    1224

ZCN8                593^4    -2^6                  597^6    590^0    6700

ZCU8                605^0    -3^2                  609^0    602^0    404

ZCZ8                 616^6    -3^6                  622^0    613^4    4914

ZCH9                626^4    -6^2                  633^0    626^2    94

Early Opening Calls: off 2-4 cents

Top News

-- Farm legislation in the US House passed on a 318-106 vote.  The President
has signaled he would veto the current $290 Bln, 5 yr bill approved by the
House, but the Senate has yet to take up bill.

-- Mexico's tortilla industry trade group estimates fuel prices & corn
prices will likely press up tortilla prices by 18% to $0.95/kg by June from
the current $0.80/kg.  However the country's economics minister said the
gov't is working w/ private companies to help keep prices from rising too
much by offering financial assistance in the form of transport subsidies.

-- UN's food organization FAO says ethanol use & lower US Corn planting will
help support prices, they estimate a fall in US Corn production of 30-35 mln
mt, while demand of corn to be used for ethanol up 20 mln mt.

-- May 1 grain stocks in the Ukraine totaled 8.6 mln mt down from Apr 1
stocks of 10.2 mln mt

-- Dalian Jan Corn futures fell 14 Yuan overnight. Settled at 1,944 Yuan/mt
($1=6.99 Yuan)

-- Globex Corn Vol: 146,968; Pit Vol.: 15,741; Open Interest change: -
13,506

-- Weather: 6-10 Day Forecast: Below Normal Temps. Normal to Above Precip.
The Corn Belt will see showers and thunderstorms today favoring the south
and east. Friday looks dry. Saturday will see some light showers in the
west. A slight chance of showers in the east Saturday. Dry Sunday. Temps
normal to below.

-- Outside markets: Energy Complex +1.20 at $125.42; Gold & Silver: +8.6 at
$875.5 & +0.257 at $16.865; US $ is trading lower vs. Euro & Yen.

Cash Markets

-- CIF Corn steady off 1. May +16 to +18, June +24 to +26, July +35 to +36,
Aug. +35 to +39, Sept. +38 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 again today.

Wheat got the break into new lows today and extended the weakness into the
close. I had though that the market could rally back with so many still
short in this contract. If we do not get a bounce tomorrow will have to come
back to the short side.



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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