Linn Group Morning Corn Comment

CHICAGO - Dec 15/09 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.

The corn market closed higher on Monday exceeding last week's highs as it
gained support from the soybean market which was strong.  The March contract
closed up about 4 cents near the highs of the session.  The corn market
opened lower in line with the night session, but quickly moved higher and
then just inched higher with the soybeans the rest of the session.  It was a
relatively quiet day in the corn market as there isn't a fundamental reason
for corn to rally unless you are looking towards next year and the market is
trying to secure acres.  The bulls continue to talk about the crop still
left in the field, quality issues, and the weakness in the US$, but much of
that talk comes after the corn moves higher.  The weather is a non-factor as
no major storms are forecast this week and many farmers still with corn in
the field are hoping/expecting to get into the field this week.  Export
inspections were within expectations, maybe on the low side, but probably
not much of a factor.  Technically, the December contracts expired at noon
on Monday, so now March is the lead contract and we will see a gap in the
charts which will be viewed as bullish.  The volume was very small at only
132,000 contracts and funds were buyers of app. 5,000+ contracts.

Overnight, the corn market was slightly lower with the March contract
closing down about 3-4 cents.  Crop progress was at 92% with some of the key
states still with 10% of the corn crop still in the field, but overall, this
was right inline with the estimate.  The NASS announced they will do a
special crop progress next week to try and finish up harvest.  Not much to
talk about right now in the grains except we continue to hear about
investment fund money coming into the grain markets and we are seeing fund
buying the last week or so.  There has been a lot of advertising on the
rebalancing of the commodity funds and most are saying we are going to see
buying of corn, beans, and to a lesser extent wheat on Jan 1st.  The outside
markets are mixed with crude slightly higher, stocks lower, and the US$
higher which is pushing all commodities lower.  The grains seemed to have
divested from the US$ but when there isn't any news, the market will look to
other reasons for market movement.  We are also approaching the holiday
season where volumes will be low and market swings can be extreme.  The corn
market will be called slightly lower inline with the night session and we
will probably need more fund money coming into the corn market to make a
push at the highs.

Globex Overnight

Contract            Last      Net Change       High      Low      Volume

ZCH10              405^0    -3^4                  408^4    405^0    3862

ZCK10              415^6    -3^4                  419^0    415^6    219

ZCN10              425^0    -3^4                  428^2    425^0    276

ZCU10              431^0    -3^0                  433^6    431^0    110

Early Opening Calls: off 2-4 cents

Top News

**USDA reports private sale of 120,000 T of US Corn to Taiwan for the 09/10
MY

-- Feed maker in S Korea is looking to buy 165,000 mt of Corn for delivery
in LH Apr to early May; they're also seeking 4,500 mt of Barley, acc. to
traders

-- Private group in Malta announced it was seeking 3,000 mt of Corn & 3,000
mt of Barley in a tender on Tuesday for delivery of the grains in January,
acc. to traders in the EU

-- 120,000 mt of feed Barley was bought on Tuesday by Japan's Ag Ministry
under previously announced SBS tender system

-- Director of the EIA in a press release say projections show that existing
policies that stress energy efficiency and alternative fuels, together with
higher energy prices, curb energy consumption growth and shift the energy
mix toward renewable fuels.  But goes on to say assuming no new policies,
fossil fuels would still provide about 78 percent of all the energy used in
2035.

-- Ohio is set to have a record corn harvest this year, 165 bushels per acre
according to USDA

-- Monday's USDA Weekly Corn Inspections: 28.088 mln bu ; expected 29.5 mln
bu

-- Liffe Jan corn futures were off -0.50 euro at 132.50 euros/mt.

-- Dalian corn futures were mostly unchanged to higher, with active Sep
contract rising 8 yuan to settle at 1,869 yuan/mt

-- Globex Corn Vol: 120,335; Pit Vol.: 7,434; Open Interest change: - 8,734

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

-- Outside markets: Energy Complex +0.48 at $69.99; Gold & Silver: -8.7 at
$1115.1 & -0.150 at $17.190; US $ +0.615 at $77.350

Cash Markets

-- CIF Corn steady off 3.  Dec. +?? to +21, Jan. +?? to +33, Feb. +36 to
+40, Mar. +40 to +43, April +37 to +40, May +38 to +40, June +38 to +40,
July +38 to +40

TREND:

Corn also was unable to rally much today but managed a firm close. There was
more farmer selling that started to surface on the day. The lower end of the
range is established at 3.80. Assume that the upper limit will be hard to
expand past the 4.21 highs of last month? Certainly feels like the easiest
path is to the top side? Last week I recommended selling calls against any
length because I do not feel the market is able to make a good trade that
extends into new highs for the short term. This contract has the most new
buying aimed at it for early Jan and the picture could change at that time.

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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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