Linn Group Morning Corn Comment

CHICAGO - Jun 15/12 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market was higher on Thursday as the warm weather comes into the
Midwest this weekend and this is going to put further strain on the corn
crop and we had some profit taking after 3 days down of over 10 cents each
day.  The July contract closed up about 9 cents while the December was up
about 5 cents.  The corn market was lower most of the night session, but
early in the morning, it moved higher and eventually the July extended to
about 12 higher before settling back.  The old crop led corn higher before
all months settled back into a trading range most of the session.  The
prices were higher until midday until all the markets sold off before
recovering into the close.  The weather story has been here for weeks as
most of the Midwest is dry, but the corn seems to be holding on because the
temps haven't been hot all the time.  The forecast has the chance of rain
this weekend into next week, so the market will look on Sunday night to see
if the rains are good or still coming.  The weekly export sales were very
poor which helped keep a lid on any rally as the demand seems to be slowing
as the second crop from So America comes to market.  The spread trade is
huge right now and that is driving a lot of the price action and while the
volume have been big, it has been mostly spread trade.  The volume was
327,000 contracts and funds were buyers of about 10,000.

Overnight, the corn market is around unchanged as it seems to be a quiet
night session in most markets.  The US$ is slightly higher which could weigh
on the grains.  The weather is the focus right now and while it is going to
be hot, most areas have the chance for good rains over the weekend and into
next week.  If these rains materialize and/or become more general, the corn
market could be under pressure.  The $5 - $5.10 level in corn seems to be
offering significant support for corn, but if the market closes through
those levels, corn could be in trouble.  Some traders will wait until the
end of the month to see the acre number before taking significant positions.
While many are looking for an increase in soybean acres and a decrease in
corn acres, we will make the argument there won't be a reduction in corn
acres.  There will be very little prevent plant this year because of the
extraordinary early planting season, so we think the USDA was missing acres
and those acres went to beans.  The corn market is trading slightly higher
as up 8:30 this morning and the bias is probably to the upside on profit
taking ahead of the weekend, but watch for any new additions of rain into
the forecast.

GLOBEX Snapshot

Contract         Last     Net Change  High   Low     Volume

ZCN12                       597.75            -3.75               603
596.25            6230

ZCU12                       520     -0.75               523.25
517.75            3052

ZCZ12                        515.25            -0.75               518.25
513     5798

ZCH13                       528     -0.25               529.75
526     218

LaSalle Street News Top News

-- Japanese Ag Ministry announced they're seeking total of 47,000 mt of
Barley in a June 29th SBS tender, the 41,000 mt food barley and 5,000 mt
beer barley is shipment by Sept 30

-- Agri- Food Canada raised their estimate for production of 8 major grain
and oilseed in 2012/13 to 71.9 mln mt vs. their previous estimate of 71.8
mln mt

-- Buenos Aires Grain Exchange pegged Argentina Corn harvest at 67.4%
complete, farmers have collected 11.45 mln mt so far.  This week's harvest
estimate compares to last week's 64.8% harvested and 10.93 mln mt collected

-- Buenos Aires Grain Exchange kept their 11/12 corn harvest outlook for
Argentina to 19.3 mln mt unchanged from last week

-- Brazil winter corn crop harvest seen at 38.8 mln mt according to analysts
at Agroconsult, they see the total 11/12 corn production at 73.7 mln mt and
all time high

-- As of June 1 grain stockpiles in the Ukraine were estimated at 10.9 mln
mt according to the country's stats bureau.  Of the total stocks wheat made
up 5.2 mln mt, corn 4.1 mln mt, barley 1.1 mln mt and rye accounted for 0.2
mln mt

-- Brazil ethanol production in the April-May period is off 26% yr/yr to 337
million gallons, acc. to UNICA data, due to persistent rain delays; this is
equivalent to only about 3-4 weeks of typical domestic consumption-- Pending
Tender:  June 12th is tender bid deadline in a 100,000 mt optional origin
Barley tender floated by Jordan on Monday, shipment is expected between LH
Aug to FH Oct, acc. to cash grain traders

-- Dalian January Corn futures on Friday fell -14 yuan to end the week at
2,273 yuan/mt

-- CBOT Corn Volume & Open Interest for June 14th 2012 was 327,594; Open
interest decreased -10,885 to 1,144,610.

-- CBOT Ethanol Volume & Open Interest for June 14th 2012 was 1,770; Open
Interest decreased -69 to 11,135.

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

-- Outside markets. Crude Oil up 23c @ $84.14; Gold up +$4.10 @ $1623.70;
Silver up +24c @ $28.65; US $ index off -7 pts @ 81.91

LaSalle Street News Cash Markets

-- CIF Corn up 2.  June +91 to +96, FH July +90 to +95, July +?? to +68,
Aug. +?? to +105, Sept. +64 to +70, O/N/D +63 to +64

TREND:

July corn still battling with the 6.00 level. Now that all of the rolls are
over many traders are focusing more towards the Dec. We have had solid
support in the Dec at 5.10 over the past month. When the bull spreads begin
to tire it should give the market a little bounce. Expect selling in the Dec
between 5.30 and 5.40. See little reason for the Dec to drop below 5.00,
however a trade below this level will change the dynamic of trade.

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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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