Linn Group Morning Corn Comment

CHICAGO - Jun 25/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly lower as outside markets weighed on the
market and generally good crop weather.  The July and December contracts
closed down about 2-3 cents which actually was about 5 cents off the lows
made earlier in the session.  The corn market opened a couple of lower and
traded in a pretty tight range before selling off in the middle of the
session.  After the initial sell off, the markets seemed to just creep
higher the rest of the trading session.  Traders/analysts point to continued
consolidation ahead of the USDA report next Tuesday morning.  The outside
markets aren't helping prices as we had a stronger US$ and weaker crude oil
market which continues to weigh on grain prices, but the market seems to be
diverging from those markets as the USDA report and weather are the main
focus right now.  After we get past the USDA report, weather will move to
the front and we will get into the dreaded weather markets where mid-day
weather forecasts can move markets all over the place.  Trading weather
markets is almost impossible to trade because the market can move faster and
harder than most people/traders can stand.  The volume was decent at 258,000
and funds were net sellers of about 5,000 contracts.

Overnight, corn was lower again on the same type of news we have been seeing
the last couple of days.  The July and December contracts closed down about
2-3 cents on the lows, but the trading range was only 3-4 cents and volume
was pretty light.  The weekly export sales 936,000 which was in the range of
the estimate, 800K to 1mil.  Not too much to talk about in export sales as
it has been largely ignored the last couple of months.  The current weather
forecast is for good growing conditions and the only worry is that the
hot/dry weather we have seen across the Midwest doesn't dissipate and it
stays hot/dry.  The USDA report is hanging over the market, so we will
probably see a two sided trade for the next 3 days.  The key for the report
on Tuesday is the acre number and will the USDA make any adjustment.  The
sentiment since the March 31st report is that we will see a reduction in
corn acres, but in surveys we have done, we aren't sure we are going to see
a major reduction and possibly the USDA will leave the corn acre number
unchanged.  If that happens, it would be considered bearish, but corn has
already broke over 15% from the highs.  Corn will be called 2-3 lower this
morning and I would expect to see it trade both sides of the market today.
We could see some profit taking the next couple of days with the recent
break, but there will be selling above the market.

eCBOT Overnight

Contract            Last      Net Change       High      Low      Volume

ZCN9                384^0    -2^4                  387^6    384^0    1363

ZCU9                392^0    -3^0                  395^6    392^0    577

ZCZ9                 404^2    -3^0                  408^0    404^2    2372

ZCH10              416^4    -3^0                  420^0    416^4    327

Early Opening Calls: Corn 2-4c Lower

Top News

**USDA Corn 08/09 Export Sales Net: 686,400 mln mt; 09/10 Net: 250,300 mt;
expected 800k-1.0 mln mt

-- Buenos Aires Grain Exchange leaves the 08/09 Corn harvest at 12.5 mln mt
unchanged from the prior week

-- Int'l Grain Council lowers 09/10 Corn production forecast to 768 mln mt
down 3 mln mt from the prior 771 mln mt

-- Int'l Grain Council lowers the 09/10 Corn closing stocks forecast to 117
mln mt from the prior report's 118 mln mt

-- 15,000 mt of feed Wheat was purchased by Israeli group late on Wednesday,
they also bought 5,000 mt of feed Barley.  The wheat was reportedly priced
at $157.70/mt, while the barley was at $149/mt

-- 22,000 mt of food grade Barley was bought in the usual Thursday Japanese
Ag Ministry tender, for shipment by Sept.

-- CME in press statement disputes the US Congressional finding on Wheat
market speculation, saying it was based on anecdotal information and
pointing out that it contradicts 4 other empirical studies conducted by 2
other gov't agencies & 2 private groups

-- CME announced June 5th that electronic trading hours for the CBOT grains,
oilseeds and ethanol contracts will be expanded in the morning by one hour
and fifteen minutes, until 7:15 a.m., beginning July 1.

-- CME Group to begin Latin American Commercial Incentive Program in August
to help rally reduced cost electronic trading for Latin American Ag Products
on the CME & CBOT.

-- Dalian Jan Corn Futures settled up +1 Yuan to 1,624 Yuan ($1=6.83 Yuan)

-- LIFFE Aug Corn down -1.50 euro to 134.5 euro/mt

-- eCBOT Corn Vol: 219,592; Pit Vol.: 14,282; Open Interest change: +265

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

-- Outside markets. Energy +0.17 to 68.84; Gold & Silver: +2.0 to 936.6; US
$ Slightly stronger than the Yen and Euro

Cash Markets

-- CIF Corn steady up 3.  June +47 to +49, July +49 to +50, Aug. +49 to +51,
Sept. +53 to +56, Oct. +46 to +49, Nov.

+47 to +49, Dec. +49 to +53, Jan. +42 to +44

TREND:

The corn has a short term negative bias looking for a test of 3.70 Apr lows.
Could not stem much of any rally at all today after but could not put it
away again either. Sideways and could even try to rally more but upside
seems pretty limited. Cash basis firming and it is affecting spreads also.
Farmer selling has just died.



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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