The corn market was higher again on Wednesday as the corn market tried to gain back some of the losses from last week. The May, July and December all closed about 8 cents higher. As one trader said, the corn market seems to be in recovery mode after last weeks general sell off in commodities as traders look at the positive fundamentals again. The corn market was also helped by outside markets as we saw a weaker US$ and a $4 crude rally. Traders keep talking about the USDA acreage report and a reduction in corn acres as a catalyst for the increase in the corn prices. Corn seems to have a fundamental base with the strong demand and the reduction in corn acres so you would think that the downside should be limited in corn, but the USDA report will tell us which way prices are going. The farmer strikes in Argentina are also helping grain prices as farmers demand a decrease in the export taxes that were increased earlier this year. Volume was heavy/moderate and funds were buyers of 6,000+ contracts on the day.

Overnight, the corn market closed a little higher as we saw a pretty quiet night compared to past sessions as traders settle into positions in front of the USDA report released on Monday before the opening. Weekly export sales this morning were ho hum at 379,900 with the estimate at 600,000 to 800,000. I don’t think the market will pay much attention to the export sales until after we get through the USDA report on Monday. Early trade estimates are saying the USDA will show 87.3 mil corn acres when they release their report on Monday. Wet weather in the south and southern Midwest which are starting to plant corn is delaying planting right now and traders are starting to talk about it, but the rhetoric will really pick up next week after the USDA report. Traders seem to be ignoring almost all fundamental news until they release of the USDA report. Corn should open unchanged, maybe a little higher, but it will look for direction and we should see position squaring in front of the USDA report.

Globex Overnight

Contract Last Net Change High Low

ZCK8 554^4 2^2 555^2 549^0 ZCN8 566^2 1^2 567^4 561^2 ZCU8 569^2 1^2 570^0 566^0 ZCZ8 570^2 1^6 571^6 565^4 ZCH9 577^6 1^0 577^6 574^0

Early Opening Calls: 1-3 cents better

Top News

**USDA Corn 07/08 Export Sales Net: 632,500 mt; 08/09 Net: 97,800 mt; expected 600-800k mt

-- Linn Group estimates 2008 US Corn Crop at 85.7 mil acres, a decline of -8.4% from last year's record crop. Linn Group sees total US crop acreage at 255.5 mil acres, an increase of just over 5 million from last year. -- Ag analysts collectively expect Monday's USDA Corn planting intentions to show 87.4 mln acres planted in the upcoming season, down from last year's record 93.60 mln acres. -- Corn Qtrly grain stocks as of Mar 1, to be released Monday, are expected by analysts at 7.1 bln bu vs. Mar 1 year ago of 6.068 bln bu. -- Mass protests are planned for Argentine capital on Friday, after 2 weeks of striking farmers halt grain & oilseed exports -- USDA planting intentions released Monday, April 1. Trade talk has plantings switching back to soybean acres from the record corn plantings last year. Analysts cite lower input costs associated with soybeans, such as less fertilizer & easing demand as ethanol prices have retreated. KC Fed economist also notes rising land & equipment prices having an impact on which crops to plant. -- Conagra reached an agreement to sell its commodity trading and merchandising operations conducted by ConAgra Trade Group to the Ospraie Special Opportunities fund and other investors for approximately $2.1 billion -- Fuel surcharge price fixing alleged by ADM in suit filed against 5 US railroads in Minnesota district court. -- 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. -- 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 were 5 lower, settling at 1,773 Yuan/mt ($1=7.04 Yuan) -- Globex Corn Vol: 150,042; Pit Vol.: 25,270; Open Interest change: +1,162 -- Weather: 6-10 Day Forecast: Above Normal Temps. Normal to Above Precip. The Corn Belt will see light showers ending in the east today. Friday and Saturday look mostly dry. Sunday and Monday will see a return of showers. Temps normal to below. -- Outside markets: Energy Complex -0.15 at $105.75; Gold & Silver: -8.0 at $941.2 & -0.353 at $18.020; US $ is slightly better vs. Euro & Yen

Cash Markets

-- CIF Corn steady. Mar. +50 to +56, Apr. +45 to +48, May +45 to +46, June +41 to +44, July +42 to +46, Oct. +43 to +45, Nov. +43 to +44.

TREND:

Wheat closed very weak continuing the feeling that developed yesterday that there is a deeper correction to come here. The weekly chart at the right shows the initial break off the highs down into the initial support level---the break was $3 and the bounce has been about $1 back testing the first Fib level. Once a top is confirmed on this market it is not unusual for a 90 pct correction of the last rally leg which is a test of 7.50 which coincides with the final Fib projection. May show better on the daily charts shown below

Corn prices gapped higher again and have the same look of a 2 day island bottom the bean charts are showing. Has a longer term bullish outlook due to acreage loss in new crop. There could be corrections to the down side but they will tend to be shallow. This market has all the ear marks of wanting to test the highs and may be prior to the crop report on Monday morning.

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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