Linn Group Morning Corn Comment

CHICAGO - Jun 3/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market moved higher on Monday as weather and planting concerns took
to the forefront and corn even moved higher after the crude oil sold off its
highs later in the day.  The July and the December contract closed over 16
cents higher, butting up against the highs made earlier in the day, closing
at new 3-week highs.  The talk on the trading floor was the crop condition
report that came out after the close.  Traders expected the report to show
50-65% of the corn crop as good/excellent which was below last year and
below the 5 yr average.  Traders also seemed to be worried about the
emergence of corn which is still behind.  Late emergence corn has
traditionally translated to a reduction in yields as the corn crop begins
the pollination phase in the hottest part of the summer which should reduce
yields.  Many areas, some estimating 5-10%, of the US corn belt has had to
be replanted because of the wet weather, so you might as well as add these
acres to the end of the planting cycle after these acres were already
counted in the planting progress survey.  This can't be ignored because of
the reduction of acres this year in the US and the expectations that the
demand for corn will remain strong.  Thunderstorms/heavy rains are expected
to continue across the Midwest this week, soaking many areas that don't need
the rains. The outside markets were supportive of corn again on Monday with
a weaker US$ and stronger crude oil prices.  In the back of their minds,
traders are still worried about the CFTC and restrictions they could put on
the commodity markets in an attempt to curb excessive speculation.  Volume
was average at app. 280,000 contracts and funds were net buyers of 7,000+
contracts.

Overnight, the corn market moved lower as it reacted to the crop emergence
and condition reports released after the close on Monday.  The corn crop was
estimated at 63% good to excellent which was at the high end of the
estimates and based on the action in corn at the end of the day, probably
considered bearish by the market.  Corn closed app. 4 cents lower in the
night session.  The 63% compares to long term average of 67% and 78% last
year.  The corn crop was only 74% emerged vs. 92% last year and 89% 5yr
average.  This number will be looked as slightly bullish especially when you
look at the state by state number.  The trading action yesterday seemed to
point to traders looking for bullish numbers and it didn't happen, so it
will be interesting to see if the market sells off today or if traders don't
believe the government numbers and continue to push corn higher.  Corn is
still trading in its established trading range as the market bumped up
against the highs again yesterday.  The outside markets will help push corn
lower today as we have a stronger US$ and a weaker crude oil market.
Traders also looking at the extended forecast that shows warmer weather is
on the way to most of the Midwest along with the thunderstorms.  Most areas
don't need any more rain which could further delay some of the late
planting.  Corn should come under pressure on the opening today, especially
after yesterday's move higher, so it will be interesting if we see some
buying on the initial sell off, or we see corn continue to stay in it's
range and goes lower.

eCBOT Overnight

Contract            Last      Net Change       High      Low      Volume

ZCN8                612^0    -3^6                  615^0    609^2    3915

ZCU8                624^2    -4^6                  627^4    622^4    891

ZCZ8                 639^2    -4^0                  642^0    636^6    2460

ZCH9                655^0    -2^2                  655^0    650^6    34

ZCK9                664^0    -1^4                  664^0    664^0    4

Early Opening Calls: Off 3-4 cents

Top News

-- Argentina farm leaders announced Monday they would extend their strike
until Monday June 9th.

-- S Korea's Pres. said US beef from cattle over 30 months of age will not
be imported.  He cited lack of public support of beef from animals that age.

-- A US congressional committee will hear testimony from George Soros today,
reportedly Soros will tell them he believes commodities, including oil, are
not a legitimate asset class for institutional investors

-- Monday's Weekly Corn Inspections: 37.376 mln bu; expected 35.0 mln bu

-- India gov't official says 2009 rise production is estimated to rise to
97.6 mln mt up from the 07/08 crop of 95.68 mln mt.

-- eCBOT Corn Vol: 239,262 ; Pit Vol.: 28,668 ; Open Interest change: +
7,157

-- Weather 6-10 Day Forecast: Above Normal Temps. Normal to Below Precip.
The Corn Belt will see chances of scattered showers and thunderstorms today
into Saturday. Temps look to be above normal.

-- Outside markets. Energy +.41 at $127.76; Gold & Silver: -6.7 at $886.1 &
-0.313 at $16.586 ; US $ is trading slightly better against Euro and Yen

Cash Markets

-- CIF Corn steady off 3. June +22 to +26, July +33 to +34, Aug. +30 to +35,
Sept. +34 to +40,Oct. +33 to +37, Nov. +35 to +40, Dec. +37 to +43

TREND:

CFTC still hanging over this market and will be bothersome again tomorrow.

Wheat got 9 pct off the recent lows in 3 days. Should have been enough. The
wheat/corn spread gained 15 cents at one point but closed well off the day's
highs.

Corn close on Jly only has 4 higher? This market could fold its tent and
surprise me but I do not think so. Spread to beans appears to be breaking
out of the recent correction of beans gaining.



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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