The corn market closed significantly higher on Monday on thin trade and technical buying as traders pointed to oversold conditions from last week. The July contract closed 17 ¾ higher and the December contract closed 18 ½ higher. Traders said that after the long holiday weekend, traders looked at the corn market and didn’t see a good fundamental reason for the sell off and with the lack of sell orders, the market found the direction of least resistance was higher. One of the biggest differences today and the last 2 weeks is there wasn’t active sell order above the market when the market rallied. Traders have been saying for the last 2 weeks that the fundamentals for corn has not changed, this recent break was a money management issue and not a corn issue. Traders pointed to delays in plantings in the south and the market expecting a significant reduction in corn acres planted as the main reason to be long corn right now. Many areas in the south have received big rains and are experiencing not just wet conditions, but significant flooding. Volume was light/moderate and funds were net buyers of 5,000+ contracts on the day. Traders point to short covering from last week as the reason for the gains on Monday, but the fundamentals are also positive, so if we have finally gotten past fund liquidation, corn could turn higher.

Overnight, corn moved higher on the back of the bean market, continuing the rally that started yesterday. The July and December contracts both closed about 7-8 cents higher as we saw the July beans up another 43 cents overnight. We have been talking about corn having little reason to come down so hard the last week or so except for fund liquidation, so it wouldn’t be surprising to see corn bounce back as traders expect a big decrease in corn acres when the USDA announces estimate acreage numbers next Monday. Traders said there wasn’t many sell orders above the market so there was little response to the buying. This week should feature choppy trade as clients try and position themselves for the release of the USDA report. The consensus seems to be a big reduction in corn acres from not just last year, but from the previous USDA estimate back in February. This decrease in acres is widely anticipated and could end up being a disappointment if they reduce usage significantly, especially in feed. The corn market should open in-line with the overnight closes and then look for direction. It will be interesting to see if the market runs into any selling on the buy side.

Globex Overnight

Contract Last Net Change High Low

ZCK8 533^2 8^4 533^6 524^6 ZCN8 545^4 8^4 546^0 536^6 ZCU8 549^0 9^0 549^0 541^0 ZCZ8 547^4 7^6 548^2 539^2 ZCH9 555^0 7^4 555^0 547^4

Early Opening Calls: 7-10 cents better

Top News

-- Weekly crop progress report from Texas showed Corn 42% planted vs. the 51% seen in same week a year ago, but just slightly ahead of the 5 yr avg of 39% planted. 12% of the Corn crop has emerged, 10 % pts behind last years pace & below the 5 yr avg pace of 16%. Corn conditions 52% excellent-good; 45% fair; 3% vp-poor. -- Weekly Georgia Corn plantings stand at 19% complete vs. 7 last week & just above the long term average of 16%. Emerged corn was 5%, up from 1% last week & ahead of the long term average of 3%. Corn conditions were pegged at 0% vp-poor; 35% fair; 65% good-excellent. -- India inks deal for potash fertilizer from Russian supplier, traders say the contracted price was $625/mt, way up from last year's $270/mt. Analysts suggest this could set the tone for other large contracts with the likes of China & South American countries yet to complete their annual deals. -- 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. -- CFTC industry roundtable scheduled for Apr 22 to discuss recent events concerning Agricultural markets. -- Dalian Sept Corn futures fell slightly off 5 to 1,775 Yuan/mt, other months were lower as well in overnight trading -- Globex Corn Vol: 154,854; Pit Vol.: 17,460; Open Interest change: -7,091 -- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to Below Precip. The Corn Belt will see chances of showers or snow showers today into Friday. Saturday and Sunday look dry. Temps normal to below. -- Outside markets: Energy Complex +0.45 at $101.31; Gold & Silver: +11.1 at $929.5 & +0.385 at $17.504; US $ is slightly lower vs. Yen & lower vs. Euro

Cash Markets

-- CIF Corn steady off 3. Mar. +50 to +52, Apr. +40 to +44, May +42 to +46, June +38 to +42, July +41 to +44, Oct. +41 to +44, Nov. +41 to +44.

TREND:

The markets were much oversold last week and due a bounce. True to form, the bounce is pretty dynamic.

Wheat spent the day inside of the Thur trade unable to close the gap left on Thur. The close was considered rather weak and leaves this market as the weak sister.

Corn prices rallied into the gap left last Thur. The trade tomorrow will be very important to showing whether this market can rally back harder leaving the two day trade as an island or set back to test support more. Fundamental outlook says we could rally more.

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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