Linn Group Morning Corn Comment

CHICAGO - Jul 9/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn closed mostly lower on Wednesday as it couldn't hold early gains.
The December contract closed down about 2 cents after trading about 5 higher
early in the session.  The corn market seems to be oversold and due a
bounce, but it finds willing sellers when the market tries to rally and it
continues to follow other markets.  The outside markets helped drag down the
corn market with crude down almost another $3 lower.  The soybeans were also
lower with old crop down 30-40 cents and new crop down about 3 cents.  The
corn market seemed to ignore the lower crude oil most of the day trading
higher, but a weaker crude oil market is bad news for corn prices because
they are heavily tied together with ethanol.  The July contract seems to be
holding up as there is little farmer selling right now.  The market also is
squaring positions ahead of the USDA report on Friday morning which will
give us stocks numbers and possible yield adjustments.  The volume was light
as compared to the previous week at only 179,000 contracts and funds were
light sellers of maybe 1,000 contracts.

Overnight, the corn market bounced higher as the outside markets and
soybeans were higher.  The December contract closed about 4-5 cents higher
last night on a rebound, but we could be seeing some position squaring and
profit taking ahead of what is expected to be a bearish stocks report
tomorrow morning.  The weekly export sales this morning were good at 1.16
mil and the market was estimating 800K to 1.0 mil.  Good export sales seem
to have been the norm as of late, but the market just doesn't care as the
feed needs are getting smaller and the traders see almost near perfect
weather and higher yields this summer.  The outside markets were supportive
earlier, but have set back this morning and won't be as supportive.  Nothing
has changed much with corn, but with the USDA report tomorrow we might see
some position squaring or profit taking.  Corn will be called higher this
morning and will look to other markets for direction.

GLOBEX Overnight

Contract            Last      Net Change       High      Low      Volume

ZCN9                340^0    0^6                   342^2    339^4    177

ZCU9                328^4    3^2                   331^4    325^6    2144

ZCZ9                 338^4    4^2                   340^6    334^6    6671

ZCH10              352^0    4^2                   353^0    348^0    229

Early Opening Calls:

Top News

**USDA Corn 08/09 Export Sales Net: 749,200 mt; 09/10 Net: 415,400 mt;
expected 800k-1.0 mln mt

-- For Friday's USDA Soybean ending stocks figures, analysts expect 08/09
Soybean stocks at 107 mln bu down from June's 110, while the 09/10 Soybean
stocks are expected to come in at 229 mln bu vs. June's report of 210 mln
bu.

-- For Friday's USDA Corn ending stocks figures, analysts expect 08/09 Corn
stocks at 1.70 bln bu up from June's 1.60, while the 09/10 Corn stocks are
expected to come in at 1.57 bln bu vs. June's report of 1.09 bln bu

-- 24,000 mt of US Corn was bought by private group in Israel in a late
Wednesday tender, acc. to traders

-- Israeli group purchased 22,500 mt of US Corn products in a late Wednesday
tender

-- Dalian Corn futures basis the Jan contract settled 1 Yuan higher at 1,605
Yuan/mt, other months were unchanged to 4 Yuan higher

-- eCBOT Corn Vol: 162,379; Pit Vol.: 12,512; Open Interest change: -6070

-- CBOT Corn Delivery: 0

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

-- El Nino conditions have developed according to US NOAA, suggests they'll
continue through the northern hemisphere's winter & may suppress this season
hurricane activity in the Atlantic.  El Nino conditions will likely be weak
to moderate, but could strengthen later.

-- Outside markets. Energy: Aug crude +1.23 @ 61.36 ; Aug Gold +$6.80 to
$916.10 & Silver: 48c higher ; US $ index lower, Euro, Swiss, & Pound higher
vs. $; Yen vs. $ lower

Cash Markets

-- CIF Corn steady up 3. July +57 to +58, Aug. +58 to +60,  Sept. +59 to
+61, Oct. +50 to +52, Nov. +51 to +54, Dec. +53 to +58, Jan. +43 to +47

TREND:

The corn market tried several times today to accelerate the bear swing,
before closing only slightly lower. With the gradual sell-off, resistance
should be building in the 3.45 to 3.50 area basis the December contract.
Look to sell rallies scale up starting at 3.40, using a stop close above
3.50. Still looking at a possible run towards the 3.00 level, and see no
signs of changing the bear stance right now.



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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