Linn Group Morning Corn Comment

CHICAGO - Jun 29/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed slightly higher ahead of the USDA report tomorrow
morning.  The July and December closed up about 2-3 cents which was near the
highs of the day, but really in a tight trading range of only about 6 cents.
We saw mostly two sided trade ahead of the report as traders don't want to
take on too many positions in front of the report.  The USDA report tomorrow
morning before the opening will give us our first indication of any changes
in acres and/or yields from the March 30th report.  We also have the end of
the quarter and end of the month tomorrow on top of the crop report, so it
could be a very busy day tomorrow as many traders won't want to do too much
on Monday ahead of the report.  A survey on analysts have on average the
acres dropping from 84.986 back in March to 84.158 mil acres.  There is a
pretty wide range of estimates and the current theory is the reduction in
corn acres won't be as big as many were predicting a couple of weeks ago.
The weather forecast across most of the Midwest continues to look great for
crop development and bearish prices.  The current forecast has cooler
weather the next week or so with a good chance of rains.  This follows the
hot/dry weather much of the area has had the last 10 days which has helped
late planted crop catch up and the early planted crops leap ahead.  The
volume was decent at 263,000 contracts and funds were small buyers of about
4,000 contracts.

Overnight, we saw corn close about 2 cents lower in a pretty tight trading
range of about 4 cents.  The corn market is probably in a 2 sided trading
range today as the market awaits the USDA report.  The outside markets
overnight were mixed with crude and stocks trading higher this morning and
the US$ about unchanged.  This is a holiday shortened week with the 4th of
July being recognized on Friday.  Also, starting Wednesday, the grain
markets will trade until 7:15 am CST instead of the 6 am close, so it will
be interesting to see if grains have more volatility as most traders will be
up and watching the last hour of trading.  Corn this morning will be called
unchanged to slightly lower and I would expect a relatively quiet trading
day ahead of the report, but it is the end of the month and quarter
tomorrow, so we could see some fund activity starting today, but the voice
of reason says to wait until tomorrow for positioning.  After the release of
the report tomorrow, option volatility takes a hit as the report is now
behind us and we have a big piece of the puzzle with the acre number.  I
wouldn't expect much from corn today except if it gets much higher, it will
find active selling.

eCBOT Overnight

Contract            Last      Net Change       High      Low      Volume

ZCN9                382^4    -1^6                  384^4    380^0    2318

ZCU9                389^6    -2^0                  391^6    387^2    1564

ZCZ9                 401^2    -3^0                  404^0    399^4    5166

ZCH10              413^6    -2^2                  416^0    412^0    91

Early Opening Calls: Corn 1-3c Lower

Top News

**USDA reports private sale of 118,000 mt of US corn for Unknown destination
for 08/09 & 09/10 MY

-- Analysts expect Tuesday'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

-- In Tuesday's USDA acreage report analysts expect Soybean acreage at 78.1
mln acres; Corn acreage at 84.2 mln acres; Cotton acreage at 8.80 mln acres.

-- USDA Ag Sec says credit crunch has put the ethanol industry in tenuous
position

-- USDA Ag Sec says he's stayed in contact with Sen. Ag Chmn about Congress
ensuring commodity market speculation helps those markets rather than hinder
price signals, he made those comments during a Reuters interview

-- Minister of Trade for Canada say he hopes his country can increase
exports of ag goods to Saudi Arabia by 40% this year.

-- Farmers in Hungary say recent precip has hampered the barley harvest, but
improved the outlook for corn plantings

-- The lower House of the Argentine Congressional race shows the President's
majority was lost in weekend elections, while her husband also lost a high
profile race in mid term elections

-- Dry weather, lack of pasture, & potential for winter feed shortage
prompts Alberta, Ca trade group to suggest ranchers will thin the herd by
between 10 -25% this year to stay in business

-- 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 unch at 1,627 Yuan. ($1=6.83 Yuan)

-- LIFFE Nov Corn Futures up +3.00 euro to 142 euro/mt

-- eCBOT Corn Vol: 221,878; Pit Vol.: 26,324; Open Interest change: -25,361

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

-- Outside markets. Energy +0.70 to 69.86; Gold & Silver: +1.6 to 942.6; US
$ Slightly better than the Yen and Euro

Cash Markets

-- CIF Corn  steady off 1. June +46 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:

Look for the trade to slow on Monday---only day of trade left prior to the
report on Tues AM. May see some spread trade as the market prepares for
deliveries as well. Flat price remains under pressure. See no reason to
change the targets but the crop report puts a new element into the trade.
Would like to be clean and out of spec positions prior to the report so we
can react to the new developments.



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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