Linn Group Morning Corn Comment

CHICAGO - Nov 16/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed about unchanged on Friday in about the middle of the
days trading range.  The corn market was able to hold the gains from earlier
in the week as harvest has continued to be drawn out process, there are
concerns about quality(especially in the ECB), weak demand, and mixed
outside markets.  On Friday, the US$ was lower which was supportive of corn,
but the crude oil was also lower which should weigh on corn because of its
close ties to energy.  The demand for corn is also not as great as some
would like to see at these prices and most think that prices are
fundamentally too high to be used profitably.  Harvest continues to chug
along, but we continue to hear stories about farmers that can't harvest as
much or as fast as they want to because of limited drying capacity, either
on the farm or at the local elevator.  The market is closely following the
quality issue which has been talked about in the ECB for the last week or so
and has prompted some hog feeders to stop using DDG's for protein.  DDG's
actually make the toxin stronger than just infected corn that is fed to
animals.  The weather picture isn't great for most of the Midwest over the
next week or so, but farmers should get some harvesting done as rains are
expected to not be really heavy.  The volume was back to normal levels of
163,000 and funds were about even on the day.

Overnight, corn started slightly higher and eventually got up 6-7 and stayed
that way most of the night closing up about 6 cents.  Not much new news to
talk about this morning with the outside markets supportive and rains across
the Midwest this week expecting to slow down harvest even more.  The US$ is
lower and crude and stocks are higher this morning which is usually
supportive news for grains.  There isn't a lot to talk about in the grains
this morning as farmers concentrate on moving forward with harvest as best
they can with all the limits they are facing.  Continue to hear talk about
shortages of LP in certain parts of the country which is helping to slow
down harvest even more.  This seems to be limited to certain areas, but it
is still disconcerting.  With the outside markets, I would expect corn to
open higher, inline with the closes this morning.  I still think that it is
going to be hard to get corn to trade and close above the $4 level unless we
get some new catalyst.  Harvest should continue to move slowly and we will
get crop progress this afternoon after the close which many are expected to
show a 10-15% increase from last week.

GLOBEX Overnight

Contract            Last      Net Change       High      Low      Volume

ZCZ9                 396^6    6^2                   397^6    390^6    8448

ZCH10              412^0    6^2                   413^0    406^0    2749

ZCK10              421^4    5^6                   422^4    416^2    280

ZCN10              430^4    6^6                   431^0    424^2    326

Early Opening Calls:  4-6 higher

Top News

-- 30,000 mt of EU Corn is being tender for by private group in Israel on
Nov 17th, they're also seeking 20,000 mt of feed sorghum.  Traders say
shipment is between Jan 20-Fed 10

-- Grain traders & analysts expect Monday's USDA report to show soybean
harvest at 90% complete, while Corn harvest is expected at 60% complete

-- Iowa corn harvest will still be a record crop and soybean production up
from 2008. Iowa forecasts at 2.44 billion bushels of corn, up about 12% from
last year. Soybeans forecasted at 486 million bushels, up nearly 450 million
bushels last year.

-- The 2009 Corn crop in France is now estimated at 15.15 mln mt up from the
prior estimated of 15.0 mln mt, but still remains 5.5% below last year's
crop, acc. to French Farm Ministry

-- Ukraine stats bureau reports as of Nov 1, total grain stockpiles are 22.4
mln mt, about 1.0 mln mt lower than at the beginning of Oct & 9% lower than
the year ago month

-- Details of Turkey's state run grain sale tenders shows they sold 100k mt
of white feed grade Barley for prices ranging from $146.56 to $147.88/mt

-- Pending Tender: Japan's Ag Ministry also announced 100,000 mt SBS feed
Barley tender, with bids due by Nov 18th

-- Pending Tender: 10,000 mt of Feed Barley is being sought in Nov 4th
tender by Oman, acc. to EU merchandisers.  Delivery was expected Nov 20-Dec
5.

-- eCBOT Corn Vol: 150,178; Pit Vol.: 14,683; Open Interest change: -4422

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

-- Outside markets: Energy complex: crude up 50c to $76.84, nat gas up 5.3c
to $4.444 ; Gold up $12 & Silver up 46.5c ; US $ index lower, off 78 pts

Cash Markets

-- CIF Corn steady off 2.  FH Nov. +51 to +54,  Nov. +49 to +52, Dec. +50 to
+52, Jan. +43 to +46, Feb. +43 to +46 ,Mar. +43 to +46, April +40 to +41,
May +40 to +41, June +40 to +41, July +40 to +41

TREND:

The $US did not maintain much of the bounce from early in the week closing
right into a new low close for the move. It is Interesting that the energy
market was not able to maintain strength in light of the weaker dollar. That
market is acting very toppy with a break out to the down side in the making.
Stay tuned. I would not press weakness here as the trade is obviously
created by concern about the CFTC position limits coming in the next several
weeks.

Corn has a reversal down from a test of 4.00 and Fib retracement levels. Has
still broken out of the recent flag formation so will be interesting to see
if it can hold on a small correction. It is harvest and there is farmer
selling there on rallies. Still look for a test of 4.05 to 4.13 and would be
more willing seller there.  The energy component of corn is now in question
with the crude weakness but on Fri the ethanol prices gained sharply on
unleaded in an effort to keep margins strong in the face of deteriorating
DDG interest in the east?  The Z/H spreads are now within 1 cent of full
carry. Time to roll short hedges forward even if on a scale

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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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