Linn Group Morning Corn Comment

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

The corn market sold off on Friday after making new highs early in the
session, but unable to hold those gains.  The December contract closed down
about 6 cents near the lows of the day and about 15 cents off the highs.
Corn seemed to run into profit taking after it got 40 cents higher on the
week, but still managed to close 25 cents higher for the week.  The higher
trade early in the day was just too much for cash sellers to resist and the
market saw heavy farmer selling as many farmers are selling corn right out
of the field because of good basis levels and quality issues in storing corn
all winter.  The December contract was unable to close over the
psychological $4 level like it did on Thursday, so that gave some traders
some pause and probably added to the selling pressure in the last 5 min of
the trading session.  The weather picture still looks wet for the next week
or so, but there could be some relief the week of November.  The volume was
good at 258,000 contracts and funds were about even on the day with the late
day sell off.

Overnight, corn traded on both sides of unchanged before closing slightly
higher.  The December contract closed up almost 2 cents overnight in about
the middle of the trading range.  Not a lot of news out this morning as
weather still remains the main feature with most areas of the Midwest
supposed to be getting rain and/or snow this week before possibly clearing
up next week.  The rain totals have been decreased across some areas, but
the rain is still supposed to fall keeping for the next week keeping farmers
from aggressively harvesting.  After the closed today, we will get some
harvest progress updates with the market expecting 21-25% of the corn
harvested.  We might not get there this week as it seems farmers were
concentrating on getting soybeans harvested ahead of corn and with the high
moisture levels, drying is taking longer than normal.  Today and this week
will be very important for corn because of the sell off on Friday.  The
weather picture still has rains across most of the Midwest a couple of times
this week and next week continues to show an active pattern.  There are some
forecasters that want to show a drier/warmer pattern after November 3rd.
Corn will be called 1-2 higher this morning, but I wouldn't be surprised to
see a two sided trade today as the market awaits the mid-day weather
forecasts and crop condition reports after the close today.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCZ9                 399^4    1^6                   402^6    395^4    6587

ZCH10              410^4    1^2                   414^0    406^6    1059

ZCK10              418^6    1^2                   422^2    416^0    173

ZCN10              425^6    1^0                   429^6    422^2    148

Early Opening Calls: 1-3 cents better

Top News

-- Agronomists & extension researchers at universities in Arkansas &
Mississippi say cotton & soybean crop losses have been significant due to
wet conditions, some fields have seen losses in range of 20-80%.

-- Harvest expectations for soybeans in this week's USDA progress report are
50% complete, while Corn harvest is expected at 25% finished.

-- Biofuel blending rate in Brazil was raised to 5% from the current 4%
after the Pres. of Brazil signed the legislation on Friday last week.  The
new blend rate begins on Jan 2010.

-- 2009 Corn production in Italy was lowered to 8.3 mln mt down from the
prior crop year output of 9.8 mln mt, acc. to Italy's Istat

-- Pending Tender: Japan's Ag Ministry and floated an Oct 29th SBS tender
for 31,700 mt of food grade Barley

-- Dalian May corn futures were 1 yuan better at 1,748 yuan/mt.($1 = 6.83
yuan)

-- Liffe Nov corn futures were off -1.50 euro at 130.0 euros/mt.

-- Globex Corn Vol: 236,362; Pit Vol.: 16,629; Open Interest change: - 953

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

-- Outside markets: Energy Complex -0.40 at $80.10; Gold & Silver: -2.4 at
$1054.0 & -0.053 at $17.670; US $ -0.070 at $75.530

Cash Markets

-- CIF Corn steady up 2. Oct. +54 to +56, Nov. +49 to +54, Dec. +53 to +57,
Jan. +46 to +49, Feb. +46 to +49 ,Mar. +46 to +49, April +42 to +45, May +42
to +45

TREND:

Corn made the retracement levels of 4.085 and traded up to 4.13 to scare
anyone that tried to sell it. The reversal should create a little trade here
but do not look for the corn chart to break down. We should see very strong
support at 3.70 to 3.60. Added to the Z/N bear spreads today at 26.



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/

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.