Linn Group Morning Corn Comment

CHICAGO - Jan 30/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed lower on Thursday on a very quiet day as the market
was caught between weaker fundamentals, more rain for Argentina, but better
export sales and still the prospect of much lower corn acres.  The March
contract closed down about 2-3 cents, but we only had a 4-5 cent range all
day.  The soybeans and wheat were also weak and that seemed to help keep
corn lower on the day even after the strong export sales.  It was announced
by the USDA that So. Korea bot 110,000 tones of US corn on Thursday morning.
The outside markets didn't help as the stock market and crude were lower and
the overall outlook for commodities remains weak as the global outlook for
demand is not good.  The stronger export sales may point to signs that maybe
some of the demand for US corn is coming back to the market, but most
traders/analysts don't expect that to keep up for the long term.  We are
also starting to see some end user buying as they have worked through their
supplies that they built up earlier last year when the market was running
and everybody was afraid they would run out of corn.  The volume was light
again on Thursday and funds were sellers of about 3000+ contracts on the
day.

Overnight was pretty quiet again as the corn market closed slightly lower on
light volume trade.  After the market closed yesterday, the weather forecast
for Argentina added more rain into the picture next week, but some
forecasters feel this might be overblown.  The bottom line is the market
didn't react real negative last night, but as the rains fall, the grain
markets should go lower.  We have been saying that these rains should have
little affect on the corn market, but it will help the soybean market and
that will drag down the corn market.  There is also some talk that because
China had such a large corn crop this year, they will be exporting some feed
corn to Japan.  To counter that talk, the USDA announced the sale of
200,000+ tones of corn to Japan this morning.  There is also talk this
morning about Argentina farmers striking next week because the government is
holding up export licenses for wheat which could eventually affect corn and
beans ??  These uncertainties in Argentina could help US exports as some of
these countries need to have grain delivered and can't afford to have
problems like they did last year.  The bottom line in corn is that we are
still in a trading range and today is the last day of the month, so we could
see some position squaring today and some fund activity.  The corn market is
giving

mixed signals fundamentally, but a break out to the downside could find some
room to run and it will be interesting to see if corn finds buyers on a
lower market.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCH9                378^6    -3^0                  382^6    377^4    2299

ZCK9                390^2    -2^6                  393^6    389^0    150

ZCN9                400^6    -3^0                  404^0    400^0    380

ZCU9                410^0    -4^0                  414^4    410^0    62

Early Opening Calls: steady

Top News

*USDA reports private sale of 213,360 mt of US Corn sold to Japan for 08/09
MY

-- USDA's CCC announced it bought on Jan 28th 17,000 T sorghum to be donated
to Zimbabwe

-- Traders report that due to lower costs and a larger than expected crop
China will resume exports of feed corn to Japan cutting into the amount that
is imported from the U.S.

-- USDA on Friday releases their semi-annual cattle inventory data report.
Analysts point toward higher feed costs & tight credit to reduce the US herd
below last year's levels & from the July 2008 semi-annual report.

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

-- 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.

-- 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.

-- Pending Tender: Ministry of Agriculture in Japan reports that they are
seeking to buy 34,000 T of food barley and 7,500 T of beer barley. Closing
date is Feb.18th.

-- Liffe Mar corn futures were off -0.50 euro at 139 euros/mt.

-- Globex Corn Vol: 116,732; Pit Vol.: 11,494; Open Interest change: + 6,225

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

-- Outside markets: Energy Complex +1.42 at $42.86; Gold & Silver: +20.2 at
$924.3 & +0.375 at $12.515; US $ is slightly better vs. Euro & is lower vs.
Yen.

Cash Markets

-- CIF Corn steady up 5.Jan. +58 to +60, Feb. +54 to +57, Mar. +52 to +54,
Apr. +39 to +42,May +39 to +42,June +36 to +39,July +36 to +39, Aug. +37 to
+39, Sept. +37 to +44, Oct. +40 to +47

TREND:

Hate to be a market follower---but we are back to feeling very soft
here---down into the bottom side of the recent range. There was some
"predatory" fund activity pressing for stops today. They found them in
wheat.

With the weather forecast for Arg tonight they may try to press corn and
beans into similar stops?

Corn remains range bound by 3.55 and 4.05. Only fundamental reason for corn
to rally is strength in wheat and beans.



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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