Linn Group Morning Corn Comment

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

The corn market closed slightly higher on Friday as the market seemed to
take a breather after the volatile week of trading after we got the USDA
report on planting intentions.  All months closed about 2 cents higher after
trading right around unchanged most of the trading session.  A late surge in
wheat and soybeans helped push corn prices higher.  Some traders were
expecting to find some aggressive buying after the May contract closed about
the psychological $4 level, but it didn't materialize.  Now that we are past
the USDA planting intentions report, traders will begin to concentrate on
getting corn planted.  We also have a supply/demand report this week that
will give us some details after we got some broad numbers last week.  The
weather picture continues to point to delayed plantings as much of the
Midwest received rain/snow mixture over the weekend.  The totals may have
not been big in all areas, but most of the Midwest is already wet, so even
average rains is going to delay planting.  The grain markets also seemed to
find fund money coming back into these markets.  The volume was ok on Friday
at 134,000 but down from the levels we had earlier in the week and funds
were light buyers.

Overnight, the corn market traded lower on the opening through most of the
evening before going higher on the day and extending the grains on the close
this morning.  The July and December contracts closed 1-2 higher, but that
was 6-7 cents off the lows that were made in the first hour of trading.  The
grains opened lower last night as the grain markets gave back some of the
late gains on Friday, but the market quickly found some buying.  The USDA
announced export sales of 116,000 tones of corn to So. Korea this morning,
half in 08/09 and half in 09/10.  The focus for corn will now turn to the
weather and when the Midwest can start planting corn as much of the area is
wet and got more precipitation over the weekend.  In talking to different
farmers across both the eastern and western corn belt, early corn planting
probably just isn't going to happen again this year.  But, farmers will tell
you that the same thing happened last year and they were still able to get a
good corn crop even when the corn was planted very late.  The corn market
will be called to open slightly higher, but I wouldn't be surprised if it
doesn't get there as the outside markets have gotten a little more negative
than when the grains closed earlier this morning.

 Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCK9                406^0    1^4                   407^2    399^6    5621

ZCN9                416^2    1^4                   417^2    410^0    1365

ZCU9                424^6    1^2                   426^0    421^2    73

ZCZ9                 437^2    1^6                   438^0    430^4    1640

Early Opening Calls: steady to 2 cents better

Top News

Private exporters reported to the U.S. Department of Agriculture the
following activity: -- Export sales of 116,000 metric tons of corn for
delivery to unknown destinations. Of the total, 58,000 tons is for delivery
during the 2008/2009 marketing year and 58,000 tons is for delivery during
the 2009/2010 marketing year; and -- Changes in destination of 116,000 tons
of corn from unknown destinations to South Korea for delivery during the
2008/2009 marketing year.

-- 23,000 mt of US Corn will be tender for tomorrow Apr 7th by Taiwan Sugar
Corp, acc. to traders

-- Dalian Commodity Exchange closed due to holiday

-- Liffe Jun corn futures were +1.25 euro better at 138 euros/mt.

-- Globex Corn Vol: 118,155; Pit Vol.: 10,884; Open Interest change: - 1,670

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

-- Outside markets: Energy Complex -2.17 at $50.34; Gold & Silver: -16.6 at
$876.6 & -0.460 at $12.285; US $ is better vs. Euro & Yen.

Cash Markets

-- CIF Corn steady up 1.Apr. +36 to +38, May +39 to +42,June +35 to +37,
July +35 to +37 Aug. +37 to +40, Sept. +37 to +40, Oct. +38 to +40, Nov. +39
to +41

TREND:

There is no doubt that the technical signals are showing more strength in
flat price than most fundamentalist are expecting. There is more to the
current market than burdensome supplies, poor margins for feeders and
ethanol, and weak economies around the world. Not sure what is driving the
trade beyond daily short covering that surfaces. Fund buying has gotten the
blame for days when the markets are stronger than expected. At least some of
that blame may have been earned based on the comm. of traders report today
but the change in positions was not enough to justify the ranges this week.
It appears to me that we will continue to drive out the shorts in this
market in the coming week. Take note that wheat can move in extreme ways in
reaction to damaging weather? There remains shorts there that may be
underestimating the risk of short positions. Respect signals flashing and
move to the side if bearish. You will get better chances to sell this
market.

Corn continues to have farmer selling slow the rallies. Expect them to get a
little bullish here if wheat reacts over the weekend to winter damage to
hard and soft wheat. Chi tends to run away from KC initially. Mpls has
already made a move to gain on all other wheat contracts based on loss new
crop acres and I do not see this changing with current weather patterns.

The spring will warm and there will be enough dry periods to get crops in
the ground---it is only the first week of Apr. But the problems in spring
wheat may not be so easily corrected?



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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