Linn Group Morning Corn Comment

CHICAGO - Sep 30/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was limit down on Monday as the financial bail out failed in
the House and it almost every market was sold from the financials to the
commodity markets.  With little to no new fundamental out on the corn market
and so much going on in the outside markets, corn is following the outside
markets.  The December contract closed the 30 cent limit making the limits
today 45 cents.  As one trader said, when you have a lot of uncertainty,
positions get smaller and traders sell the market.  The crude oil also
helped push the grain markets lower trading as much as $12 lower after the
grains closed and still closed down over $10.  The August lows for corn are
within range and will probably become a target for traders.  Traders said
there seemed to be some interest from end users for corn on the lower
prices, but the need to liquidate long positions and/or new short positions
seemed to over take any buying interest.  The weather remains in the
background, but it can’t be ignored as most of the Midwest has had a problem
free fall so far with the 1st good chance for frost/freeze seems to be later
this week/weekend.  The volume was still on the light side, but this may
become the new norm, but option volume was very big.  Funds were net sellers
of 8,000+ contracts.  Remember, today is the end of the quarter, so we could
see some positioning today.

Overnight, the corn market continued to sell off actually taking out the
August lows before rallying up and closing almost 20 cents off the lows.
The December contract closed up 8 ½, but part of this rally could have been
profit taking after making new lows and the release of the USDA quarterly
stocks this morning.  The USDA released the quarterly stocks this morning,
details below, and it was a little higher than expected which should give
the bears further ammunition.  I don’t know how much the market will pay
attention to these numbers as the USDA numbers as of late haven’t carried
the weight as it has been in the past.  The outside markets are still to be
watched as the US$ is up significantly today which will help pressure the
grain markets because it makes US grains that much more expensive.  The corn
market is called to open lower this morning and the worry is that all the
short covering we may or may not have seen overnight may come back into the
market today.  Be careful with the new lows as it could find support or the
selling could gain strength.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCZ8                 521^4    8^4                   524^6    501^2    11989

ZCH9                541^0    10^0                  542^6    519^2    1833

ZCK9                546^6    4^2                   546^6    530^6    275

ZCN9                563^6    11^2                  563^6    541^4    391

Early Opening Calls: off 5-7 cents

Top News

**USDA Corn Qtrly Grain Stocks:  1.624 bln bu.; est 1.54; Jun 1st 4.028 bln
bu.; Sep '07 1.304

-- Monday's USDA Corn Inspections: 40.164 mln bu.; expected 30.0

-- USDA weekly progress report showed corn Dented 96%, that's behind last
year's pace of 99% & the 5 yr avg of 98%.

-- USDA weekly progress report showed corn Mature 52%, that's behind last
year's pace of 88% & the 5 yr avg of 79%.

-- USDA weekly progress report showed corn Harvested 9%, that's behind last
year's pace of 29% & the 5 yr avg of 21%.

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

-- UBS bank commodity report estimates nearly $1.4 bln has flown out of
agriculture commodity indices in the latest week.  -- -- The CFTC as of the
end of June had estimated $200 bln was in ag related commodity indices,
Citigroup issued a report suggesting those positions have dwindled to around
$100 bln.  Another analyst with the CRB index group sees the drop from a
more conservative stance & pegs the drop more likely in the $40-50 bln range
to around $150-$160 bln total invested.

-- Despite tighter credit terms, ethanol producer Poet says they're keeping
an eye out for asset acquisitions, acc. to the CEO of the company.

-- Economist in a survey expect 2009 Chinese GDP to just slip into single
digit growth of 9.0% from prior polls suggesting growth at or above 10.0%.
Single digit growth has happened in China since 2002.  They point to weak
exports, rising energy costs, rising labor costs, & overall slowness in real
property sector.

-- Dalian Exchange is on public holiday from Sept 29 through Oct 3rd

-- Globex Corn Vol: 139,298; Pit Vol.: 12,232; Open Interest change: - 3,785

-- Weather: 6-10 Day Forecast:  Above Normal Temps.   Normal to Below
Precip. The Corn Belt will see scattered showers ending in the east today.
Wednesday into Saturday looks dry. Temps look to be normal to below.

-- Outside markets: Energy Complex +1.62 at $97.99; Gold & Silver: -5.9 at
$882.3 & -0.361 at $12.659; US $ is trading better vs. Yen & Euro.

Cash Markets

-- CIF Corn  steady  up 2.  Sept. +42 to +44, Oct. +41 to +43, Nov. +43 to
+46, Dec. +46 to +50, Jan. +36 to +39 Feb. +36 to +39, Mar. +36 to +39



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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