Linn Group Morning Soybean Comment

CHICAGO - Jul 31/06 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean Update: Fridays session closed November soybeans up 3 cents in a
very quiet session. Extreme heat throughout the growing region has traders
discussing lower soy yields because that crop is in its sensitive
pod-setting stage of development. Overnight November Soybeans traded 6 ½
cents higher. Forecasts keep extreme heat in the growing areas with
temperatures of 100 to 110 stretching from Texas to Canada for another 3
days. 6 to 10 day forecast call for above normal temperatures and normal to
below normal precipitation. The commitment of traders report with options as
of July 25th shows funds short 14,751 Soybeans up 8,462, Meal short 25,170
up 1895 and Oil long 68,209 off 5,013.Large speculators sharply increased
their short positions in Soybean futures during the week. Deliveries for
soybeans thru 6/30/06 were 326 contracts. Deliveries were light as most
traders were looking for heavy deliveries due to high freight costs. The
cost to ship commodities by barge freight hit a seven-month high just two
weeks ago as low water slowed movement.

In other news Japan and Mexico are active in U.S. Beans. Latin meal export
interest in combo with corn. U.S. domestic meal basis is very weak. China
domestic vegoil prices have been extremely strong all week. Japanese soybean
crushers and Taiwanese grain buyers are likely to be active, with reports
that Japanese soybean buyers are looking to cover their requirements for
Sept. Malaysian Palm oil futures rose on Monday boosted by robust exports in
July and lower output due to weather. Funds on Friday bought 2,000 Soybeans,
6,000 Oil and sold 400 Meal.


 Cash markets saw CIF premiums firm for Corn and Soybeans Friday
CIF Corn up 1 with July +46 to +48, Aug. +48 to +50.  River house bids
mixed. CIF Soybeans up 1 to 3  July +51 to +54,, Aug. +54 to +57. Processor
bids mostly steady.
 Barge freight steady :  STL  490 - 500   IL. River  500 - 520  Ohio  470 -
480  Soybean psread: JPM 400 SQ/SX, Tenco 400 SQ/SX, Bunge 400 SX/SF, RJ 400
SQ/SU.

     ****************** Cash Markets********************
CIF Soybeans  up 1 to 3.  July +51 to +54,  Aug. +54 to +57, LH Aug. +52 to
+62, Sept. +40 to +45,
Oct. +45 to +50, Nov. +52 to +55, Dec. +46 to +51, Jan. +52 to +56.
Processors:    Decatur  -12   Danville -10   Bloomington  -20   Gibson City
-20
Board Crush Margins:        Aug.  74.28  off  1.12   Sept. 71.46 off  .79
Oct.  63.08  off  .37

COMM OF TRADERS: Updated to show the last CFTC report. Accumulated positions
options.
WHEAT CORN BEANS OIL MEAL
COT 07/25/06 13,200 196,300 -18,000 74,400 -19,600
L.G. Est 07/25/06 29,570 201,900 -15,300 65,000 -25,500
COT w/Opt 07/25/06 23,800 212,700 -14,700 68,200 -25,100
Fund Activity
26-Jul -6000 -6800 -1800 -2000 3200
27-Jul 3400 6700 -4000 -1600 -2800
28-Jul 1200 -3000 2100 6000 -500
Est. Fund Position 22,400 209,600 -18,400 70,600 -25,200
record fund positions past 46 279 82 81 43
7 years (thou contracts) -56 -129 -56 -42 -33

To discuss this report further or for specific trade ideas please contact me
directly

Nathan T. Smith III
Linn Group
nsmith@linngroup.com
toll free: (877) 787-6278
local: (312) 896-2090
fax: (312) 896-2050
www.linngroup.com/

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