Linn Group Morning Corn Comment

CHICAGO - Sep 23/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was higher on Monday following the night session as we saw
much higher crude oil prices, much lower US$, and limit up moves in the
soybeans.  The corn market is a follower right now looking at the other
markets and there seemed to be some traders that were caught short.  The
crude oil market closed up over $6 in the November contract, but the October
made all the press as it expired on Monday and there was a short squeeze
pushing it almost $25 at one point late in the session.  The financial bail
out of the financial industry has created talk of inflation and higher
commodity prices.  Traders also couldn't ignore the lower US$ as it makes US
exports, grains, cheaper and thus more attractive to foreign countries.  The
big question is that even if US grains are cheaper, is the demand
domestically and worldwide going to be that much lower that it won't matter.
On the bearish side, the weather remains excellent for late crop development
and maturing.  The forecast for most of the Midwest is for above normal
temps and little, scattered precipitation.  The threat of frost/freeze isn't
here for the next week and as one agronomist said, we are having an
excellent finish to a trying growing season.  The volume was app. 192,000
and funds were net buyers of 8,000+ contracts on the day.

Overnight, the corn market closed a little lower as we had a lower crude oil
market, a higher US$ and a lower soybean market.  What helped the corn
market yesterday, hurt it overnight.  The corn market closed down about 3
cents in the middle of the trading range on a pretty lack luster night
trading session.  The USDA released crop progress report yesterday that was
the same as last week and it showed the corn way behind in maturing, but
this isn't anything new to traders/analysts.  The corn market is starting to
see some battle for corn acres as parts of the country is starting to get
into winter wheat planting season.  The number of acres that is planted for
winter wheat will directly affect acres next spring.  We have seen this
acreage battle really heat up in the soybeans, but to a lesser extent in the
corn.  The corn market will open lower this morning and then it will look
for direction.  The crude oil has come of the lows from last night and is
almost unchanged and the US$ is off the highs from overnight.  Right now,
the corn market is probably in a trading range, but we are starting to see
traders/analysts look to buy the corn market.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCZ8                 555^2    -3^2                  559^0    549^4    6156

ZCH9                571^4    -4^6                  576^2    568^0    329

ZCK9                583^4    -3^6                  588^0    579^2    42

ZCN9                592^6    -3^6                  597^0    589^4    110

Early Opening Calls: off 3-5 cents

Top News

-- Informa pegged 2009 US Corn plantings at 90.5 mln acres, a rise of about
3.5 mln acres from this year

-- S Africa's state grain stats show Corn stocks as of Aug 31 were 8.32 mln
mt vs. a revised July 31 7.954 mln mt.

-- Weekly S African grain

-- Monday's USDA Weekly Corn Inspections: 33.139 mln bu ; expected 32.5 mln
bu

-- USDA weekly progress report showed corn Dented 90%, that's behind last
year's pace of 98% & the 5 yr avg of 95%.

-- USDA weekly progress report showed corn Mature 33%, that's behind last
year's pace of 76% & the 5 yr avg of 63%.

-- USDA weekly progress report showed corn Harvested 5%, that's behind last
year's pace of 20% & the 5 yr avg of 14%.

-- Latest weekly Corn conditions were slightly changed: vp-poor category 14%
vs. prior week's 13%, fair category 27% vs. 26% last week & combined
good-exc categories were 59% vs. 61% last week.

-- May Dalian Corn futures were off 6 to 1,778 Yuan/mt, other contract
months were also lower by 1 to 8 Yuan on Tuesday

-- Liffe Nov corn futures were off 1 euro at 154.75 euros/mt.

-- Globex Corn Vol: 174,517; Pit Vol.: 13,748; Open Interest change: - 3,087

-- Weather: 6-10 Day Forecast:  Normal to Above Temps. Normal to Below
Precip. The Corn Belt looks mostly dry today into Sunday. Temps above
normal.

-- Outside markets: Energy Complex -2.01 at $107.36; Gold & Silver: -7.7 at
$896.4 & -0.059 at $13.424; US $ is trading slightly better vs. Euro & Yen.

Cash Markets

-- CIF Corn steady off 8.  Sept. +?? to +52, Oct. +44 to +47, Nov. +44 to
+47, Dec. +44 to +52, Jan. +38 to +42 Feb. +37 to +39, Mar. +37 to +39

TREND:

Market will want to see more detail and progress on the bailout of the
financial firms. The fact the stocks indexes closed very weak is a warning
sign the enthusiasm could wan quickly. The initial reaction to this news was
short covering catching grain traders short with not much for sale on the
first day or two of the rally.



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/

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.