Linn Group Morning Corn Comment

CHICAGO - Jan 28/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower today as rains fell across Argentina and the
outside markets pressured the corn market.  The March contract closed down
over 16 cents.  The corn market opened lower than expected and then traded
7-10 lower most of the trading session before the market sold off into new
lows late in the session.  Traders also looked at the weather maps and saw
the rain falling in Argentina and that help pressure the markets.  The rains
weren't general and won't do a lot to relieve long term drought conditions,
but at this point every little bit helps, or at least that is the theory
being floated by the bears.  The rain is definitely bearish for the soybean
market and the soybeans lead the grains lower making the lows of the day on
the opening.  The current weather forecast is starting to take out some of
the rain for this weekend and next week, but if yesterday's action is any
indication, the market may not care.  The volume on Tuesday was better than
the last couple of days, but not great at only 177,000 contracts and funds
were sellers of around 7,000+ contracts.

Overnight, we saw the grain markets drift lower as it is raining in So.
America and the grains are trying to break out of the recent trading range.
The March contract was down about 3-4 cents last night, but overall it was a
pretty quiet night.  The corn market will await export sales tomorrow
morning to see if that can lend any support to the markets as the sales have
been relatively strong the last couple of weeks.  The corn market has been
in a trading range recently and yesterday it closed down through the bottom
of the recent range which could open up the downside.  There has been
technical talk that with the recent tight trading range, if the market broke
out either way, we could see a big move.  Now that we have broken through
the downside, we will see if the corn gains momentum or if it finds support.
There wasn't a lot of news overnight, but there is some countries looking
for corn, specifically So. Korea seeking 330,000 tones of corn.  Argentina
seems to be getting the rain that was forecasted and some of the models are
taking reducing coverage over the weekend and next week.  The damage to the
corn market is already done, so the rains may mean less to the corn market
right now.  Some traders also are saying that with the damage done, they can
get a better estimate of production, so they can quantify the problem and it
takes some of the premium out of the corn market.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCH9                373^6    -3^6                  381^6    373^4    5570

ZCK9                384^6    -3^6                  392^2    384^4    453

ZCN9                395^2    -4^0                  402^2    395^2    337

ZCU9                412^2    2^6                   412^2    409^2    7

Early Opening Calls: steady to off 2 cents

Top News

-- Total of 330,000 mt of Corn is being sought in a Wednesday tender by the
largest feed miller in S Korea, acc. to traders.  Delivery is expected
between April - August.

-- EU traders on Tuesday said that 20,000 MTof European corn to be sold
to Israeli firm.

-- Supply concerns push ethanol production credits up 28% in the latest
week, to 15 3/4c to 17 1/2c, acc. to industry observers cited by Reuters

-- 110,000 mt of opt. origin feed grade Barley were tender for by Iran on
Wednesday, acc. to traders.  The grain is expected for delivery in LH Feb -
March.

-- Dalian Commodity Exchange is closed for the Chinese New Year holiday. It
will reopen on Mon, Feb 2.

-- China's Dalian exchange is closed for the Lunar New Year & are to resume
trading on Feb 2nd

-- Bunge, the agri-commodity powerhouse, has begun talks to purchase a major
stake in GMR industries working toward their goal of purchasing sugar
companies with ethanol making capabilities says a Bunge spokesman.

-- CFTC spokesperson says the commission will extend the period to review
the CBOT's proposal on non-grain firm limits on delivery certs to Feb 4,
2009.

-- Chinese diplomat in London says China does not manipulate its currency &
the US has enough facts to know China doesn't manipulate it, says the change
in policy stance isn't fair nor helpful during these difficult economic
times

-- Pending Tender: USDA's CCC issued Jan 28th tender to purchase 17,000 T
sorghum to be donated to Zimbabwe

-- Pending Tender: 15,000 mt of feed Barley was being sought in Jan 28th
tender floated by Israel for shipment between Apr 25-May 15

-- Pending Tender: 150,000 mt of opt. origin Corn is sought in a Jan 31
Pakistan TCP tender.

-- Pending Tender: 50,000 mt of optional origin feed Barley is being tender
for by Jordan's gov't controlled grain buyer on Feb 18th.  Shipment is
expected for April.

-- Liffe Mar corn futures were off -1.00 euro at 141 euros/mt.

-- Globex Corn Vol: 163,633; Pit Vol.: 8,085; Open Interest change: - 3,221

-- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to Above
Precip.

-- Outside markets: Energy Complex +0.12 at $41.70; Gold & Silver: -2.6 at
$896.5 & -0.113 at $12.062; US $ is slightly better vs. Yen & is lower vs.
Euro.

Cash Markets

-- CIF Corn steady off 3 Jan. +53 to +60, Feb. +50 to +53, Mar. +48 to +50,
Apr. +37 to +39, May +37 to +39,June +36 to +39,July +36 to +39, Aug. +37 to
+39, Sept. +37 to +44, Oct. +40 to +47

TREND:

Wheat still the leader here. Even though closing lower, has maintained to
positive momentum. WH needs to get back over 7.11 to build upside power
again. The lows at 5.48 would be a bad trade and take the market back to a
test of the lows again. Do not expect that to happen soon.

Corn certainly felt soft today but remains in a range bounded by 3.55 and
4.05. Starting to spend a little too much time to be comfortable that this
market will move through the highs but the formations do not make me
bearish. Will address more of the fundamentals of corn tomorrow



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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