Linn Group Morning Corn Comment

CHICAGO - Oct 14/08 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The outside markets rebounded from the deep sell off last week and helped
push the grain markets higher on Monday.  The December contract sold off at
the end of the day, but it still closed up 3 cents after being up 14-15
cents earlier in the trading session.  The corn market followed the outside
markets higher on Monday as we now have the USDA report behind us and the
market now has very little fundamental data to digest.  The weather remains
a minor factor in harvest as rains moved across the Midwest pushing back
harvest, but many farmers are still concentrating on harvesting beans.
After the breakdown in the grain markets the last 10 days and the limit down
move on Friday, the grain markets are bouncing regardless of any fundamental
data.  Monday was a gov't holiday so volume was light with the banks closed
and some traders taking a long weekend.  There is also little movement by
the farming community as you see very little farmer selling and very little
buying of the high cost inputs with the lower grain prices from earlier this
year.  The volume was only 162,000 contracts and funds were buyers of 4,000+
contracts.

Overnight, we continued to see a rebound in the outside markets and that
helped pump up the grain markets with the corn trading higher all night and
closing up about 13 cents.  The crop condition report is pushed back until
Tuesday because of the government holiday.  The corn market is probably
oversold and the market has been caught up in the financial crisis that has
gripped the world, but most traders/analysts will agree that any rally in
the grain markets should be limited because of the decrease in demand for
grains across the world.  The USDA told us on Friday that the corn crop got
bigger from the September estimate and history tells us it will get bigger
with the November and January crop reports.  These bigger yields along with
declining domestic and international demand will increase supply and
decrease prices.  There is very little fundamental news now with the USDA
report in the marketplace, so the grain markets will once again look to the
outside markets and right now those markets are supportive to grains.  The
corn market should open higher today, but be careful buying a higher market
as rally's should be limited.  There should be selling on a higher corn
market and it will be tough for corn to hold gains.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCZ8                 424^6    13^2                  428^4    417^0    7359

ZCH9                440^6    11^2                  446^0    435^0    694

ZCK9                450^6    9^4                   458^0    447^0    65

ZCN9                460^2    8^2                   468^0    458^2    103

Early Opening Calls: 10-13 cents better

Top News

-- Ag Ministry of Russia says the country exported 6.04 mln mt of Wheat in
first 3 months of the 08/09 marketing year, while exports of Barley were
pegged at 768,000 mt

-- At its intervention tender Tuesday, Russia's gov't bought a total of
18,765 mt of feed Barley, bring yearly total bought to 77,865 mt.

-- Noting a weak S Korean Won currency keeping import prices high, a leading
S Korean food processor says it will keep grain import purchases to minimum
levels until currency levels stabilize

-- Ukraine's ag ministry data shows bunker weight of all grains harvested
have topped 47.13 mln mt through Oct 13th.  This year's harvest is 70% more
than by the same time a year ago.  Harvest is 88% complete.

-- S Africa exported 34,210 mt of White Corn in the week ending Oct 10th,
acc. to the country's grain stats bureau

-- Dalian May corn futures were 26 Yuan better at 1,667 Yuan/mt.

-- Liffe Nov corn futures were 3.75 euro better at 132.75 euros/mt.

-- Globex Corn Vol: 135,156; Pit Vol.: 16,337; Open Interest change: - 454

-- Weather: 6-10 Day Forecast: Above Normal Temps. Above Normal Precip. The
Corn Belt will see some showers today favoring southern areas. Wednesday
will see showers in the central and eastern areas. Thursday mostly dry.
Friday showers favoring the east. Temps normal to below.

-- Outside markets: Energy Complex +3.11 at $84.30; Gold & Silver: +12.9 at
$852.0 & +0.364 at $11.154; US $ is trading lower vs. Euro & is slightly
better vs. Yen.

Cash Markets

-- CIF Corn steady off . Oct. +55 to +59, Nov. +54 to +57, Dec. +54 to +58,
Jan. +43 to +46 Feb. +44 to +47, Mar. +44 to +47, Apr. +38 to +42

TREND:

Markets bounced in response to the outside influences of strong equities,
weak dollar, and strong energy markets. The rally held better in soy oil and
wheat. Leaving the Fri limit trades set up at least the chance of an interim
bottom. The economy is not really any better so we will continue to search
out indications that the detraction of demand has come to an end. The buyers
are getting a double blessing with ocean freight off 80 pct from the summer
highs to a 5 year low. That in conjunction with lower grain prices should
start to encourage some consumptive buying. Fixing credit services so that
trades can be consummated is a very important step to fixing the world
economic stage. Then it is to be determined how much demand remains.

Corn was the least able to maintain the rally today. Harvest remains
heaviest in beans and farm selling is not very active. Appeared to be heavy
wheat/corn spreading late in the day that pressured corn while supporting
wheat. Corn was only able to close marginally higher. Major resistance is
obvious in the 4.50 gap. The question will be weather we can garner enough
oomph to test that level?



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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