Lurking behind the leaders is two-time defending champion Annika Sorenstam. Sorenstam moved into a share of third place with a 3-under 69. She is joined at 5-under-par 139 by Carin Koch (67) and Janice Moodie (72).
Players completed the first round earlier on Saturday after rain caused delays on Friday that eventually forced play to be halted due to darkness. Saturday saw rainy and windy conditions, but there were no stoppages in play.
Kung began on the back nine and got going quickly with a 3-foot birdie at the 12th and a 20-footer at 13. She moved to 6 under with a 4-foot birdie putt at the par-4 17th.
She ran off four straight pars around the turn. Kung tripped to her lone bogey of the round at the par-4 fourth when she three-putted.
Kung then rolled in a 15-footer for birdie at the sixth and came right back to birdie No. 7 to get to minus-7. She parred her final two holes to share the overnight lead.
'I'm hitting the ball pretty good so I'm very happy with my game,' Kung said. 'I'm very happy with the way I played the last two days, and hopefully the weather will get better tomorrow and we'll have another good day.'
Kane meanwhile teed off on the front side and picked up her first birdie at the par-3 second when she chipped in from 25 feet out. She has birdied that hole in each of the first two rounds. From there, she ran off nine straight pars.
Kane, a four-time winner on the LPGA Tour, dropped in a 7-foot birdie at the par-5 12th. She then birdied the par-3 13th for the second straight round to get to minus-7. The 38-year-old parred her final five holes to close a bogey-free round.
'It's just a test of survival, and you really don't think of par, you just try to get shots and hit it solid,' said Kane. 'The greens are holding up wonderfully, and the ball's rolling really true.'
Sorenstam will try to do something no one else has done. No player has won this event three straight years.
'To shoot 3 under today, I'm pleased with that. I thought it was tough,' said Sorenstam. 'We had a lot of wind and then the rain picked up and was blowing sideways. The bottom line is I'm in position to win a tournament and that's why I practice and that's what I look forward too.'
Grace Park, Angela Stanford, Hee-Won Han and Christina Kim share sixth place at 4-under-par 140. Karen Stupples and Michelle Ellis are one stroke further back at minus-3.
The cut line fell at 3-over-par 147. Eighty-five players made the cut, but among those who missed the cut was first-round leader Brandi Jackson. After opening with a 66, the rookie stumbled to a 10-over 82 to finish at 4-over- par 148.