The corn market closed slightly higher on Thursday as the corn market sold off early and often, but was able to recover as traders decided to take profit as the corn moved lower the last 4 days and we had commercial pricing. The July contract closed up 2 ¾ and the December closed up 2 cents after both of the contracts were down almost 15 cents during the session. Soybeans were the leader lower early in the session as there was talk in a resolution to the strike in Argentina, but as those talk dissolved, beans rallied off the lows and helped pull corn higher on the day. The weather forecast remains positive for corn planting and that is weighing on the corn market. For most of the session, crude oil was helping pressure the corn market, but it recovered late as well closing slightly lower, but almost $3.00 off the lows. The volume was light again at app. 215,000 contracts, especially with the deep break early in the session, and funds sold 5,000+ contracts at the end of the day. Technicians pointed to the corn market as being over sold and after hitting some key support areas, the market was able to bounce. Traders point to improved planting conditions and most areas have excellent sub-soil conditions, so when the corn gets planted, it should give it a good start, especially as the weather gets warmer.

Overnight, the corn market continued higher following beans and crude oil moved higher. The July and December contracts closed 3-4 higher as crude oil surged to new highs and the strike in Argentina seems to be extended another week as talks don’t seem to be going anywhere, so beans continued to move higher off the lows. The weather forecast continues to show good planting conditions in the western corn belt (WCB) and ok planting conditions in the eastern corn belt (ECB) as it receives some scattered rains. The short covering could continue today as traders are nervous about going into a weekend short corn and corn has had a good break this week. Planting progress will be announced on Monday after the close and the expectations are for another 25% of the corn was planted this week taking the total to 75% which is still 12% below the 5yr average. Any rally should be met with active selling as the corn is finally getting planted and a stronger US$. Crude oil is not trading over $127 per barrel which is a new all-time high and will lend support. The corn market should open higher today and then look to find support. The corn market, with little new news, will look at the beans and the crude oil market for direction today.

Globex Overnight

Contract Last Net Change High Low Volume

ZCN8 602^4 3^4 603^0 599^2 3152 ZCU8 614^6 3^4 615^0 611^0 147 ZCZ8 627^2 4^6 627^2 623^0 1814 ZCH9 638^0 3^2 638^2 634^6 32

Early Opening Calls: 2-4 cents better

Top News

-- Turkey's TMO state grain board has said it will "soon" tender for import of 150,000 mt of Corn, timing has yet to be determined. -- 100,000 mt of barley tender was issued by Jordan's state grain buying arm on Monday, the bid deadline is May 20th. 50,000 mt are expected for LH June & the other 50k mt are expected in FH July -- Japan is seeking 28,000 mt of Food barley at May 29th tender -- Informa Corn Acreage May Estimate: 87.2 mln ac.; Apr report 87.5 mln ac, USDA estimate 86.0 mln ac -- Argentine farm union leader, Buzzi, suggested the nation's farmer will likely continue their strike. -- Thursday's USDA Corn 07/08 Export Sales Net: 547,200 mt; 08/09 Net: 139,300 mt; expected 450-650k mt -- Strategie Grains raised its EU Corn output for the 08/09 crop to 57.6 mln mt up from their prior estimate of 57.3 mln mt. -- Strategie Grains lowered its EU Barley output for the 08/09 crop to 61.1 mln mt down from their prior estimate of 61.5 mln mt. -- Dalian Jan Corn futures were down 1 Yuan overnight, settling at 1,943 Yuan/mt ($1=6.99 Yuan) -- Globex Corn Vol: 189,452; Pit Vol.: 19,001; Open Interest change: - 106 -- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to Above Precip. The Corn Belt looks dry today. Saturday will see a few light showers favoring the northeast. Sunday and most of Monday looks dry. Light showers favoring the east late Monday. Tuesday looks mostly dry. Temps normal to below. -- Outside markets: Energy Complex +2.70 at $126.82; Gold & Silver: +14.8 at $894.7 & +0.275 at $16.955; US $ is trading slightly lower vs. Euro & is slightly better vs. Yen.

Cash Markets

-- CIF Corn steady off 4. May +?? to +18, June +21 to +23, July +33 to +35, Aug. +33 to +35, Sept. +37 to +42,Oct. +38 to +43, Nov. +39 to +43, Dec. +42 to +46

TREND:

Corn into support and bounced giving a reversal that could prove more positive for the next few days trade. Just have to confirm it over the next few days.

Wheat got the break into new lows today and went right to 7.50. It also bounced closing 20 cents off the lows. I continue to like corn/wheat but may be smart to be long flat price corn and take the wheat short to an out of the money call for a moment. Give this market room for a small bounce. It is very oversold so that the reversal could lend support.

If you have any questions, or if you would like to discuss specific trade recommendations on any markets, contact me directly.

Jim Riley Linn Group 877-787-6278 jriley@linngroup.com

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