Linn Group Morning Corn Comment

CHICAGO - May 16/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly higher on Thursday as the corn market sold
off early and often, but was able to recover as traders decided to take
profit as the corn moved lower the last 4 days and we had commercial
pricing.  The July contract closed up 2 ¾ and the December closed up 2 cents
after both of the contracts were down almost 15 cents during the session.
Soybeans were the leader lower early in the session as there was talk in a
resolution to the strike in Argentina, but as those talk dissolved, beans
rallied off the lows and helped pull corn higher on the day.  The weather
forecast remains positive for corn planting and that is weighing on the corn
market.  For most of the session, crude oil was helping pressure the corn
market, but it recovered late as well closing slightly lower, but almost
$3.00 off the lows.  The volume was light again at app. 215,000 contracts,
especially with the deep break early in the session, and funds sold 5,000+
contracts at the end of the day.  Technicians pointed to the corn market as
being over sold and after hitting some key support areas, the market was
able to bounce.  Traders point to improved planting conditions and most
areas have excellent sub-soil conditions, so when the corn gets planted, it
should give it a good start, especially as the weather gets warmer.

Overnight, the corn market continued higher following beans and crude oil
moved higher.  The July and December contracts closed 3-4 higher as crude
oil surged to new highs and the strike in Argentina seems to be extended
another week as talks don’t seem to be going anywhere, so beans continued to
move higher off the lows.  The weather forecast continues to show good
planting conditions in the western corn belt (WCB) and ok planting
conditions in the eastern corn belt (ECB) as it receives some scattered
rains.  The short covering could continue today as traders are nervous about
going into a weekend short corn and corn has had a good break this week.
Planting progress will be announced on Monday after the close and the
expectations are for another 25% of the corn was planted this week taking
the total to 75% which is still 12% below the 5yr average.  Any rally should
be met with active selling as the corn is finally getting planted and a
stronger US$.  Crude oil is not trading over $127 per barrel which is a new
all-time high and will lend support.  The corn market should open higher
today and then look to find support.  The corn market, with little new news,
will look at the beans and the crude oil market for direction today.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCN8                602^4    3^4                   603^0    599^2    3152

ZCU8                614^6    3^4                   615^0    611^0    147

ZCZ8                 627^2    4^6                   627^2    623^0    1814

ZCH9                638^0    3^2                   638^2    634^6    32

Early Opening Calls: 2-4 cents better

Top News

-- Turkey's TMO state grain board has said it will "soon" tender for import
of 150,000 mt of Corn, timing has yet to be determined.

-- 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

-- Japan is seeking 28,000 mt of Food barley at May 29th tender

-- Informa Corn Acreage May Estimate: 87.2 mln ac.; Apr report 87.5 mln ac,
USDA estimate 86.0 mln ac

-- Argentine farm union leader, Buzzi, suggested the nation's farmer will
likely continue their strike.

-- Thursday's USDA Corn 07/08 Export Sales Net: 547,200 mt; 08/09 Net:
139,300 mt; expected 450-650k mt

-- Strategie Grains raised its EU Corn output for the 08/09 crop to 57.6 mln
mt up from their prior estimate of 57.3 mln mt.

-- Strategie Grains lowered its EU Barley output for the 08/09 crop to 61.1
mln mt down from their prior estimate of 61.5 mln mt.

-- Dalian Jan Corn futures were down 1 Yuan overnight, settling at 1,943
Yuan/mt ($1=6.99 Yuan)

-- Globex Corn Vol: 189,452; Pit Vol.: 19,001; Open Interest change: - 106

-- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to Above
Precip. The Corn Belt looks dry today. Saturday will see a few light showers
favoring the northeast. Sunday and most of Monday looks dry. Light showers
favoring the east late Monday. Tuesday looks mostly dry. Temps normal to
below.

-- Outside markets: Energy Complex +2.70 at $126.82; Gold & Silver: +14.8 at
$894.7 & +0.275 at $16.955; US $ is trading slightly lower vs. Euro & is
slightly better vs. Yen.

Cash Markets

-- CIF Corn steady off 4. May +?? to +18, June +21 to +23, July +33 to +35,
Aug. +33 to +35, Sept. +37 to +42,Oct. +38 to +43, Nov. +39 to +43, Dec. +42
to +46

TREND:

Corn into support and bounced giving a reversal that could prove more
positive for the next few days trade. Just have to confirm it over the next
few days.

Wheat got the break into new lows today and went right to 7.50. It also
bounced closing 20 cents off the lows. I continue to like corn/wheat but may
be smart to be long flat price corn and take the wheat short to an out of
the money call for a moment. Give this market room for a small bounce. It is
very oversold so that the reversal could lend support.



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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