Linn Group Morning Corn Comment

CHICAGO - Jun 26/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed lower on Thursday actually making new lows at the end
of the trading session.  The July contract closed down about 4 cents with
the December closing down about 6 cents.  The corn market opened lower and
traded in a tight range most of the day before breaking down at the end of
the session.  This is really the first time we have seen the old and new
crop diverge a little bit as the market is now trying to tell us that maybe
there is more corn acres planted or yields are going to be closer to
trendline.  Traders/analysts had built in a lower acre number and possibly
reduced yields as much of the ECB got planted so late.  The weekly export
sales were good and the outside markets were supportive, but corn just
didn't care and still went lower.  The weather remains bearish as the hot
weather is helping crops catch up from the cool/wet spring and there isn't
any worries about the hot weather because of good soil moisture levels and
the forecast for next week is for cooler temps.  The volume yesterday still
good at 278,000 contracts and funds sold about 6,000 contracts.

Overnight, corn closed up 1 in a tight trading range of only about 4 cents.
The corn seems to be in a trading range waiting for the release of the crop
production report on Tuesday morning.  The outside markets are mixed with
crude and stocks about unchanged, but the US$ is down about 70 pts which
should be supportive.  Corn is probably in a holding pattern until we get
through the USDA report.  Rally's will be sold and any big drop in prices
right now is probably supported.  Corn has broke over 15% in the last 10
days and is probably low enough until we get acre, yield, and carryout
numbers.  The old crop soybeans are starting to gain some momentum and could
pull the rest of the grain market higher if they really catch fire.  Corn
will be called to open 1-2 higher today and we could see a higher trade
today as traders square positions in front of the weekend and the USDA
report next week.

eCBOT Overnight

Contract            Last      Net Change       High      Low      Volume

ZCN9                383^4    1^0                   384^4    380^2    1890

ZCU9                391^0    1^0                   392^2    387^6    1064

ZCZ9                 402^6    1^2                   404^0    399^2    4007

ZCH10              415^0    1^2                   416^0    411^6    101

Early Opening Calls: Corn unch to 1c Higher

Top News

-- Analysts expect next week's USDA quarterly Jun 1 grain stocks of Corn at
4.20 bln bu.; Soybean stocks at 585 mln bu; Wheat stocks at 670 mln bu

-- According to USDA Under Sec., just over 900 farmers out of an eligible
1.3 mln growers have signed up for the Average Crop Revenue Election
program.  The sign up period is only available until Aug 14th

-- US Railroad industry trade group report says in a weekly report that
freight traveling by rail was still 18% lower than the same period a year
ago.  In the Jan 1 to June 20 period rail freight volumes were 20% lower
than in the same 2008 period

-- EU official says in the latest week the zone cleared 388,000 mt of Wheat
Exports & 61,000 mt of Barley exports.  This week's figures raise the season
to date totals to 21.83 mln mt & 3.43 mln mt, respectively

-- Barley harvest to begin in southern Germany & rapidly spread north,
analysts say the timing is within norms.  They also expect wheat harvest to
begin on time in mid-July.

-- Insee, the French stats office, says while overall grain prices rebounded
in May by nearly 2% from the prior month, they were still almost 13% lower
than the same month last year.

-- French corn prices rose at 13% clip in May from the prior month, acc. to
the country's stats institute.  They say downwardly revised corn output
figures & better demand from northern European states helped push prices
higher

-- Total grain exports from the Ukraine rise to 1.3 mln mt in the Jun 1 -24
period compared to the same period in May when only 968,000 mt were
exported, acc. to figures released by private crop forecaster UkrAgro

-- Saskatchewan gov't crop report shows recent rains were widely spread over
the province helping improve growing conditions, with 77% reporting adequate
topsoil moisture

-- Meat market analysts expect today's USDA quarterly hogs & pigs report to
show all hogs at 98% of last year, hogs kept for breeding at 97% of year ago
& hogs kept for marketing at 98% of year ago levels

-- 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 up +2 Yuan to 1,624 Yuan. ($1=6.83 Yuan)

-- LIFFE Nov Corn up +1.75 euro to 138.5 euro/mt

-- eCBOT Corn Vol: 224,937; Pit Vol.: 40,633; Open Interest change: +1,874

-- Weather: 6-10 Day Forecast:  Normal to Below Temps. Normal to Above
Precip.-- Outside markets. Energy down -0.38 to 69.85; Gold & Silver: up
+5.8 to 945.3; US $ Slightly Better than the yen and weaker against the euro

Cash Markets

-- CIF Corn steady.  June +47 to +49, July +49 to +52, Aug. +49 to +52,
Sept. +54 to +56, Oct. +46 to +49, Nov. +47 to

+49, Dec. +49 to +52, Jan. +42 to +44

TREND:

The market continues to mark time awaiting the report next week but a
negative bias applies to flat price---only the bull spreads in beans and
meal had much of a positive trade.

Corn continues to chew lower also but has stayed within the early week
parameters. Look for it to stretch to the down side yet. Nothing bullish in
the weather outlook other than some concern about the delta crop where it is
very hot and dry. Most of the Midwest has water to get past a few days heat.
As mentioned earlier this week---firming basis levels are slightly bullish
the spreads. Short hedges should be moved forward



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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