I searched the Supplement to the Official Records and found reference to Magnolia Grove at two places.

The 7th Vermont Infantry on April 12, 1865, left Stark's landing [which was 7 hours march from Blakely] where they went aboard transports. At 11 o'clock, having crossed the bay, disembarked at a place known as Magnolia Grove, five miles from the city of Mobile, the outskirts of which we arrived at and encamped that night

The 2nd Illinois Cavalry, was stationed at Magnolia Grove, near Baton Rouge, Louisiana, July-August, 1864.

The 53rd Massachusetts Infantry Left Carrollton for Baton Rouge, arrived March 7, 1863. Went into camp at Magnolia
March 13-20 - Marched again for Port Hudson and returned to Magnolia Grove March 20
April 1 - Encamped at Baton Rouge until April 1, when we received orders to move.

There is a Magnolia Grove Baptist Church located in Zachary, LA on 17762 Old Scenic Highway, near Port Hudson, Miss.

Are there any other clues found in the letter, and are your sure it was written from Magnolia Grove, Miss.?