Linn Group Morning Corn Comment

CHICAGO - Mar 6/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was lower on Thursday on a very quiet day.  The July and
December contracts were both down about 6 cents which is where those
contracts sat most of the day.  Traders/analysts pointed to the outside
markets as the main reason that the grain markets were down, but the corn
market did find some support on decent export sales, but nobody knows if
those sales will continue.  The Dow was down another 200 pts on Thursday,
the crude oil was down about $1.70 and the US$ was up about 50 pts.  Traders
also pointed to the rally on Wednesday and profit taking ahead of the end of
the week.  The corn market seems to be in a consolidation phase and the
grain markets are paying more attention to the outside markets than any
fundamentals because this time of the year there is typically little news.
Historically, this time of the year, grain prices go higher, so it has been
tough to get any follow through to the downside, but the fundamentals tell
us it will be tough to rally the grain markets.  There is also talk about
the ethanol blend and the talk has gone from if they are going to continue
the blend to how is the blend going to be in the future.  This is important
as ethanol has helped not only increase corn prices, but keep prices higher.
The volume was light at only 126,000 contracts as the spread volume just
wasn’t there today and funds were small sellers of about 2,000+ contracts.

Overnight, the corn market was slightly higher overnight, but off the highs
for the night session.  The corn market was pretty quiet overnight, but it
did close near the bottom of the range after it was up about 4 cents in the
middle of the night.  I don’t always put a lot of credence in the overnight
markets, especially this time of the year when we don’t even have any crops
in the ground and most guys are still a little undecided on exactly what
they are going to plant.  The export sales on Thursday will be looked at as
positive, but nobody knows how long that will last if the markets finally
open up down in Argentina and Brazil as their harvest gains steam.  The corn
market will open higher this morning, probably a little better than the
closes overnight because the overnight markets will be supportive with the
US$ down 100pts and crude up over $1.00 after the grains closed this
morning.  The grain markets will probably be higher today, but we need to
keep an eye on the outside markets as those have seemed to lead the grain
markets lately.  The Dow has been down about 400 pts this week, so a short
covering rally today wouldn’t be a big surprise and will help support
grains.  The corn market is still in a trading range, but the bias still
seems to be negative.  The key for corn prices over the next month or so is
the weather and how acres of corn are actually planted.  The Midwest saw
warmer weather with strong winds which is exactly what you want to see to
get the ground fit for planting.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCH9                352^0    2^6                   352^0    349^6    43

ZCK9                359^4    1^0                   362^6    358^0    1781

ZCN9                369^0    1^2                   372^2    367^4    444

ZCU9                380^4    4^2                   380^4    376^2    24

Early Opening Calls: 2-4 higher

Top News

-- 40,000 mt of Argentine Corn was bought by top Philippine food & beverage
maker for Apr/May delivery, acc. to traders

-- Beijing's China Grain Reserves Corp. says that China may not have to
purchase the entire 40 mln T of corn as planned. China has purchased 27 mln
T of corn and 3.5  T of soybeans so far this year in an effort to help boost
prices and increase farm income.

-- Cellulosic biofuel plant was announced by Range Fuels & its partner
Emerson after they recently received a $80 mln USDA loan to build a facility
in Soperton, GA by 2010.  The plant reportedly will ultimately produce 100
mln gal of biofuels

-- If the gov't increased the US ethanol fuel blend to 15% from the current
10% the US ethanol industry could create an additional new 136,000 jobs &
add an additional $24 bln to the economy each year, acc. to alternative fuel
industry group Growth Energy

-- Brazilian business newspaper says there are 2 companies in the lead to
buy a stake in a top ethanol producer Santelisa Vale.  The paper says
Dreyfus & Bunge are top contenders while BTG investment funds is also
considered a top suitor.

-- A USDA attaché report says that pork and beef exports from Brazil are
likely to drop in 2009 due to poor global credit markets.

-- Pending Tender: Iran for 100-110,000 mt of optional origin Corn tender
bid deadline March 3rd for shipment in May.

-- Pending Tender: EU traders report that Iran's state owned animal feed
import agency has issued a tender to buy 110,000 t of feed barley for
shipment in April and May with a closing date for bids of March 3.

-- Pending Tender: A ministry official says Japan's Ministry of Agriculture
is seeking to buy 20,000 mt of food barley and 4,900 mt of beer barley using
the SBS, simultaneous buy and sell system, with a closing date of March 18
with shipment by June 30.

-- CBOT Corn Delivery: 0

-- CBOT Ethanol Delivery: 0

-- Liffe Jun corn futures were +1.00 euro better at 129.5 euros/mt.

-- Dalian Sep corn futures were off 4 Yuan at 1,685 Yuan/mt.($1 = 6.84 Yuan)

-- Globex Corn Vol: 115,441; Pit Vol.: 8,065; Open Interest change: - 3,760

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

-- Outside markets: Energy Complex  +1.39 at $45.00; Gold & Silver: +30.6 at
$938.8 +0.451 at $13.326; US $ is off vs. Yen & Euro.

Cash Markets

-- CIF Corn steady up .Mar. +40 to +43, Apr. +42 to +46, May +45 to +48,June
+37 to +39,July +37 to +39 Aug. +40 to +43, Sept. +40 to +43, Oct. +40 to
+??

TREND:

Corn continues to fail when given chances to break out to the top side. I
continue to feel there is a chance of bottoming action with the market
behaving seasonally. Still see the market as range bound---CK  3.45 to 3.85.
Fade the extremes here.



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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