The corn market closed higher on Tuesday up near the highs, but unable to push into new highs on the close. The May and July contracts closed around 8 cents higher and the December closed 6 cents higher. The corn market is trying to rally and the crude oil trading up $4.00 higher helped corn higher. Traders said corn rallied on technical buying and the possibility of planting delays because of the huge rain event across most of the middle/south part of the Midwest which is just getting started planting or starting to think about planting. The bean complex is still negative even though it closed higher and that market is the leader of the soy complex. The volume was light on Tuesday and funds were net buyers of 6,000 contracts at the end of the day. Traders pointed to the outside markets as the reason for the rally after the corn market sold off along with everything else on Monday on the back of the Bear Stearns news bleeding into other markets. There is very little new news out on the corn market except maybe So. America harvest and that is just beginning and seems to be going very well.

The corn market broke down last night as we found new fund selling on continued liquidation. Traders pointed to the soy complex and the outside markets for the sell off overnight in corn. The corn market has every reason to rally higher with the lower expected acreage estimate by the USDA when they release their report on March 31st, but the market just can’t overcome the fund liquidation and overall market volatility. Corn closed down 10-13 cents overnight after trading almost limit down during the session. Beans closed 20 cents lower after being over 40 cents lower and led the sell off along with the outside markets (crude down $3.00 and gold down $35). The corn market is caught in between the fundamentals telling you that a huge reduction in acres should be bullish corn and the general sell off in commodities pushing the corn lower. We continue to hear that the reduction in corn acres will be significant and the rains across the southern Midwest is delaying plantings and could stop any farmer selling as they try and keep supplies tight and push up prices. The big question is whether fund trade and/or liquidation is bigger than the market fundamentals. Corn should open lower in-line with the overnight markets and then look for direction. The outside markets are significantly lower than when corn closed 3 hrs ago.

Globex Overnight

Contract Last Net Change High Low

ZCK8 535^6 -11^4 548^6 531^0 ZCN8 548^2 -11^0 561^0 543^2 ZCU8 550^6 -10^6 561^4 544^0 ZCZ8 548^0 -13^2 562^2 542^6 ZCH9 558^0 -11^2 570^6 552^0

Early Opening Calls: 10-12 cents down

Top News

-- US farm industry magazine survey shows 2008 Corn plantings at 87.7 mln acres vs. the 93.6 mln last season as shift to soybeans takes place. A similar poll taken in Dec has 88 mln acres devoted to corn. The survey also estimated Soybean acres at 71.8 mln vs. the 63.6 mln acres last year and vs. 69.5 mln in a Dec poll. An analyst for the magazine said the drop in corn acres . The poll was conducted from end of Feb to middle of March & had 974 respondents. -- Ukraine Ag ministry data shows 2008 Corn crop forecast at 8.4 mln mt up about 1.0 mln mt from 2007. -- French gov't panel affirmed the ban on GMO Corn MON810. -- In 4Q '07 Goldman Sach's earning results show a 46% jump in commodity trading by group, while they pulled back 17% of capital deployed in equities trading. Despite the pull back in equities & more exposure to hot commodities markets, Goldman ' net income was $1.51 Bln down from the $3.2 Bln in same quarter a year ago. -- Late April or early May might be the time for a World Trade Organization deal acc. to the top EU Ag minister. -- CME Group announced it will offer electronically traded options on futures contracts in Corn, Soybeans, Soymeal, Soyoil, Wheat, Oats, & Rough Rice side by side during day-time open outcry trading hours beginning April 14, 2008. -- Dalian Sept Corn futures rose 18 Yuan to settle on 1,779, while the rest of the complex settled higher also -- Globex Corn Vol: 138,385; Pit Vol.: 21,060; Open Interest change: +6,027 -- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal Precip. The Corn Belt will see showers coming to an end in the east later today. Thursday looks dry. Friday will see some light showers . Saturday and Sunday look dry. Temps normal to below. -- Outside markets: Energy Complex -2.06 at $107.36; Gold & Silver: -24.5 at $980.1 & -0.271 at $19.700; US $ is slightly lower vs. Euro and Yen

Cash Markets

-- CIF Corn up 3. Mar. +41to +??, Apr. +39 to +41, May +41 to +44, June +37 to +39, July +41 to +42, Oct. +39 to +42, Nov. +40 to +46.

TREND:

New fund money into the market late today was the talk. The rally back in the $US is just that. Not much but could be signs this is overdone.

Wheat continues to have these spastic rally days on any excuse. Market is still on a downtrend. But you have to be aware that the cash markets in old crop wheat can still drive this trade considerably higher. Business is the excuse today, hard wheat conditions add something also. High quality wheat premiums remain under pressure.

Corn continues to show evidence that it is not a bear market. Buy weakness, but recognize that other markets could have a detrimental effect on flat price corn.

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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