Linn Group Morning Corn Comment

CHICAGO - Dec 29/06 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn futures followed soybeans higher on Thursday as the March contract
closed almost 2 higher on average volume.  July07 closed above the $4.00
psychological barrier for the first time.  The soy complex, specifically the
soyoil, helped push corn higher on a day when we had very little new news
out on corn.  Traders are still wary of new investment dollars coming into
the corn market so they are reluctant to sell the market.  Also, traders are
aware that the market is record long and the big players will want to try
and pump up the market to make their positions look good going into the end
of the year.  Demand remains very strong helping keep corn prices higher,
but on the negative side, we continue to hear talk of acres switching from
beans to corn and the weather in So. America remains very conducive for
growing crops.

eCBOT markets were a little higher overnight on light volume with the Mar
closing 1 higher.  Export sales released this morning a day late because of
the holiday were very strong as usual at 1.153 mil, beating the estimate of
800,000 to 1 mil.  Traders can't say enough about export sales as they
continue to dominate the market coming in above the estimate week after
week.  The demand for corn isn't a new story, but continued strong export
sales and domestic demand for ethanol and feed will keep corn prices higher.
One veteran traders is quoted as saying the corn market is already trading
an increase of 8-10 mil acres for 2007.  If the acres increase this much, it
will probably mean a decrease of 7 mil soybean acres.  The big question will
be whether demand will be able to keep up with the increased acres and thus
the increased size of the corn crop.  To me, it doesn't look like these
higher prices has curbed consumption yet, so we could still see higher
prices.  Look for the funds to make some noise today either buying or
selling, but it makes more sense for them to try and prop up their long
positions than to sell the market and make their long positions look worse.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZCH7                389^6    1^2                   390^4    387^6

ZCK7                397^4    1^2                   398^4    396^0

ZCN7                402^2    1^2                   403^2    401^0

ZCU7                386^2    0^6                   386^2    385^4

Early Opening Calls: slightly higher

Top News

**USDA Corn 06/07 Export Sales Net: 1.153 mt; expected 800,000-1.0 mln

-- Rains/storms in Argentina have greatly benefited crops already in ground,
but lead to some delays in planting.

-- Excessive rains in S Africa help buoy corn future prices overnight.
Basis the March contract corn futures 1.62

-- Argentine corn planting progress:  91% complete, even with last year's
mark, est. total acreage = 8.5 million acres

-- Argentine soybean planting progress:  84% complete, -5% pts off last
year's pace;  total est acreage = 39.5 million acres

-- 6-10 day forecast shows normal temps and precip

-- Outside markets:  energies lower, metals higher, dollar lower against
most major currencies

-- Volume was 101.1 with open interest up 5.0 to 1395.3

Cash Markets

            Bn Barge           Corn Barge        SRW Barge       HRW Track
12Pro          ILL RIV FRT

FH Jan  +44/47 F           +25/29 H             +5/18 H            +62/  H
275

Jan       +48/51 F           +32/35 H              +13/20 H          +63/
H             290

Feb       +39/41 H           +38/40 H              +20/35 H          +65/
H             315

Mch      +41/45 H           +42/45 H              +25/30 H          +65/75 H
325

Truck                Beans     Corn               Wheat   Meal Hi-pro
Oil

Chicago                       -15 F     -11 H              -45 H

Toledo              -24 F     -21 H              -45 H

Dec ILL            - 3 F     - 5 H                           -12 F
-125 F

TREND:

Trade gets very difficult and trying to predict the next several weeks off
this weeks trade is really impossible---with any sense of reliability. Yet
we try to do it anyway-

Still see plenty of support under corn with uncovered users. Momentum on
rallies is suspect. Trade seems to be looking at the potential of new fund
money flowing into the buy side of the market next week. There is a very
popular idea around that the rebalancing and any liquidation will take place
in the second week of the month? Flat price is very close to new highs on a
front month---already there on the long term charts and the new crop markets
have been into new highs every day for the last week. Continue to see
heavier farmer selling in those delivery periods and this hints that the
gains in corn acres are growing---may be the most bullish thing for beans?



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.

PageGen v1.0ef