Linn Group Morning Corn Comment

CHICAGO - May 8/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was higher on Thursday despite the sell off in other
markets, especially soybeans.  The July and December contracts closed about
4 cents higher which was about 7 cents off the highs from earlier in the
session, but off the lows.  The soybean market, especially old crop, broke
down yesterday after making new highs early in the trading session as rumors
floated that China had pushed back some cargoes to later in the summer, but
as one analysts said, it doesn't matter as long as they keep buying old crop
beans.  The weather picture doesn't look good for farmers trying to get corn
planted, especially in the ECB as more rain fell across some of the wet
areas in central IL which is some of the biggest corn producing counties in
the US.  As one analysts said, it is the WCB vs. the ECB with the WCB way
ahead in acres planted, but the ECB way behind and the forecast doesn't look
good for them to catch up.  Some trades want to talk about fund money coming
into commodities in general and that money is probably going to go into corn
as it has been the weak sister of the grain complex and planting is way
behind in the ECB.  Corn was also helped yesterday as we saw funds buying
corn and selling soybeans as a spread, which might have been liquidation.
The export sales were a little weak, but as I mentioned yesterday, it is
probably largely ignored and remember, export sales only represent about
15-20% of corn usage, the rest is used domestically.  We saw good volume in
corn yesterday at 291,000 contracts and funds bot 10,000+ contracts.

Overnight, the corn market was stronger again last night closing up about
3-4 cents in all months.  Rain fell across central IL yesterday late after
the grains closed which should set them back another week or so in some
areas as they are already wet and the maps I saw this morning had most of
central and southern IL getting .3 to 1 in rains yesterday.  Nothing has
really changed in corn right now, the wet weather is preventing many farmers
from getting into the fields and getting corn planted and farmers in the WCB
are way ahead.  The forecasters have taken some of the warmer temps out of
the forecast for next week which many farmers were hoping would help dry
fields that continue to get rains.  The demand situation in corn remains bad
and that should keep a lid on any rally in corn unless we get a fundamental
change such as lower corn acres or later this summer, lower yields.  The
domestic demand isn't going to get any better anytime soon unless the
hog/cattle prices get better.  The corn market will be called 2-4 higher
inline with the closes overnight and then it will look for direction.  The
outside market are supportive and could help grains, but it is the end of
the week and we need to see how these market close, not how they open.
Informa will come out with updated acreage numbers at 10:30am this morning
and that could have an affect on the market.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCK9                408^0    3^2                   408^0    404^4    17

ZCN9                415^4    3^4                   416^2    410^2    3493

ZCU9                424^2    3^6                   424^2    419^4    208

ZCZ9                 434^6    3^6                   435^0    429^4    1492

Early Opening Calls: 2-4 cents better

Top News

**Stats Can Mar 31 Oat Stocks: 2.547 mln mt; expected 2.6 mln mt; yr ago
period 2.3

**Stats Can Mar 31 Barley Stocks: 6.00 mln mt; expected 5.6 mln mt; yr ago
period 4.5

-- Analysts expect the USDA's 08/09 Corn ending stocks at 1.69 bln bu.,
while 09/10 Corn ending stocks in next Tuesday's report are expected at 1.28
bln bu.

-- Philippine state run food authority says a private group will import up
to 41,000 mt of feed Corn for delivery by mid-June on behalf of the agency

-- Saskatchewan based Potash Corp forecasts tight supply of potash
fertilizer over the next 5 to 10 years.  They note major users of the
commodity have dipped heavily into their stockpiles & expect those users to
rebuild those stocks over time

-- Brazil's Ag minister addressing a Reuters conference says farm expansion
over the medium term will be limited by infrastructure constraints &
environmental regulations.

-- Dalian Sep corn futures were off 4 Yuan at 1,659 Yuan/mt.($1 = 6.83 Yuan)

-- Liffe Jun corn futures were +1.50 euro better at 147 euros/mt.

-- Globex Corn Vol: 267,643; Pit Vol.: 20,585; Open Interest change: - 2,344

-- CBOT Corn Delivery: 0

-- Weather: 6-10 Day Forecast: Normal to Above Temps East, Normal to Below
West. Above Normal Precip.

-- Outside markets: Energy Complex +1.54 at $58.25; Gold & Silver: +3.2 at
$914.2 & +0.053 at $13.885; US $ is off vs. Yen & Euro.

Cash Markets

-- CIF Corn steady off 2.--May +?? to +37,June +38 to +40, July +40 to +41,
Aug. +37 to +41, Sept. +44 to +50, Oct. +41 to +43, Nov. +41 to +43, Dec.
+43 to +45, Jan. +38 to +42

TREND:

Corn and wheat both got a round of buy stops today but the heavy farmer
selling stopped the rally. Support in CN at 4.00 to 3.95. Look for the highs
to come out here for some of the same reasons that beans and meal have
used---user has used up inventory and is not replacing it other than hand to
mouth. No one has the margins to go forward too far---it is against human
nature.  Small setbacks in both crops and small rallies but maintaining a
positive bias for  a while. Wheat remains the weak sister with short term
5.50 support and 5.75 resistance in Chi Jly.



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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