The corn market closed limit up on Tuesday after closing up almost limit up on Monday. The May, July, and December closed up the 20 cent limit on Tuesday as traders said they saw fund buying, a weaker US$, and worries about delayed plantings because of wet weather in the southern part of the Midwest. Speculative funds were back in buying the grains this week after we have seen stabilization in the financial and commodity markets. The soy complex led the grains higher as traders continue to position themselves in front of the USDA report and beans took a big hit last week. Traders are starting to talk about possible delays in corn seedings as much of the Midwest receives significant rains, but as one analyst said, we still have plenty of time to get corn in the ground, but it is very wet for the 1st week in April. Full speed ahead in corn seedings in Illinois and Iowa doesn’t begin until the middle of April until the middle of May, but because demand is so strong and the increase in bean acres, they can’t afford to lose many acres. Volume was light, as expected with limit up trading, and funds bot 5,000+ contracts.

Overnight, the corn market continued to move higher late in the session after trading unchanged the first couple of hours. The May, July, and December closed about 8-9 higher and the bean market continued its run up with the July closing another 45 cents higher. Traders point to probably oversold conditions last week as traders scramble to regain longs and cover shorts in front of the USDA report on Monday morning released before the opening. Traders point to fund buying right now and positions squaring in front of the USDA report. We also hearing talk of delayed plantings, but I would guess that won’t gain a lot of strength until we get through the crop report and get into at least the 1st week of April. We look for the corn market to open in-line with the overnight markets and then look for direction. The commercials have locked out many farmers by refusing to offer prices more that 60 days out which prevents sell orders when the market is rallying. This will make rallies bigger than they should be and taking a portion of the price action out of the market discovery process. Remember, if your local elevator won’t make you a price now, when he calls looking for grain, don’t make him a price.

Globex Overnight

Contract Last Net Change High Low

ZCK8 553^4 8^6 553^4 541^4 ZCN8 566^0 9^0 566^0 554^2 ZCU8 568^6 8^6 568^6 558^2 ZCZ8 569^0 9^2 569^0 556^6 ZCH9 576^0 8^4 576^0 566^4

Early Opening Calls: 7-9 cents better

Top News

-- In continuing effort to stabilize domestic prices, China's gov't State Council announced plans to raise grain minimum purchase prices & lift agricultural subsidies to domestic producers to ensure grain supplies. -- French port workers strike to protest the gov't proposal to privatize 7 of 9 public ports. -- CFTC approved new daily price limits to begin March 28, 2008, for CME Group corn, mini-sized corn, soybeans, mini-sized soybeans and soybean oil futures and options on futures contracts. Corn price limits will be increased to $0.30 from $0.20 per bushel, soybeans to $0.70 from $0.50 per bushel and soybean oil to $0.025 from $0.020 per pound. In addition, daily price limits for wheat, mini-sized wheat, corn, mini-sized corn, soybeans, mini-sized soybeans, soybean meal, soybean oil, oats and rough rice futures can expand twice, by approximately 50 percent each time, when market conditions dictate that an expansion is warranted. -- Mississippi River lock & dam #25 repairs scheduled to begin Mar 31 will stop north & south bound barge traffic for up to 8 days, acc. to US Army Corp of Engineers. The lock & dam is 60 miles north of St Louis. -- White Corn exports from S Africa total 8,891 mt last week, yellow corn exports total 1,057 mt -- Some rumblings about wetness delaying Corn seedings being in the southern & southeastern US, but analysts say there is still time to see drying & planting progress. -- Dalian Sept Corn futures settled higher, rising 3 Yuan to 1,778 Yuan/mt -- Globex Corn Vol: 108,814; Pit Vol.: 17,184; Open Interest change: -5,923 -- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to below Precip. The Corn Belt will see some light precip today favoring the east. Thursday will see rains favoring the south. Friday and Saturday look mostly dry. Rain returns Sunday. Temps normal to below. -- Outside markets: Energy Complex +1.01 at $102.21; Gold & Silver: +9.9 at $944.9 & +0.246 at $18.058; US $ is lower vs. Euro & Yen

Cash Markets

-- CIF Corn steady up 3. Mar. +52 to +56, Apr. +45 to +47, May +43 to +46, June +41 to +43, July +44 to +45, Oct. +42 to +44, Nov. +42 to +44.

TREND:

The market today extended past dynamic. Trade is too big for many to handle---me included. If you did not cover short corn ore beans from week on the open yesterday---this has become very painful. Options vol back to spiking as well

Corn prices gapped higher and is sure to make the user wonder why he did not cover more last week. This market now has last weeks end as an island bottom unless it is closed over the next two days? Powerful signals but who knows how this widely swinging market ends up in front of the Mon AM report.

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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