Linn Group Morning Soybean Comment

CHICAGO - Sep 7/06 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean Update: Soybeans traded lower on Wednesday by 7 ½ cents in the
November contract. This is the lowest close since February 2005. Traders say
this is a key close below 550 and a technically weak close, breaking the
market 8 cents in the last 15 minutes of trade. Informa economics released
their crop production estimates yesterday and shows soybean estimate at 42
bpa and for a 3.108 bil. bu. crop. Overnight China reportedly bought more
U.S bean cargos. One estimate puts it at 5 so far this week. Rising freight
rates are limiting China's soybean purchases despite a pick-up in meal
demand from the poultry and hog industries. Reports out of China say the hog
and poultry industry sectors are faring a lot better and have returned to
profitability recently. Traders say at current premiums, Chinese crushing
margins are still negative and little interest at premiums of 180 cents and
below. Funds on Wednesday sold 1,000 Soybeans, 1,500 meal and 3,500 Oil.
Overnight Chinese soybeans, meal and oil futures closed lower. Malaysian
palm oil futures closed mixed.

eCBOT Overnight
Contract            Last                  Net Change       High      Low
ZU6                  N/A                   0^0                   N/A
N/A
ZX6                   545^6                -1^0                  547^4
545^2
ZF7                   559^2                -0^4                  560^0
558^6
ZH7                  572^4                0^6                   572^4
571^2
ZK7                  582^0                -0^4                  582^0
582^0
ZMV6                159.5                0.3                    159.6
159.2
ZMU6                158.8                0.2                    158.9
158.6
ZMZ6                161.5                -0.1                   162.0
161.4
ZLU6                 24.32                0.04                  24.32
24.25
ZLV6                 24.44                -0.01                 24.48
24.40
ZLZ6                 24.85                -0.04                 24.93
24.80

Early Opening Calls: steady/lower

Top News
-- South Korea tendering for 25,000 mt. non GMO US Soybeans for Dec.

-- AgResource issued a new Soybean production estimate of  3.094 bil.bu.
They are estimating a national average yield of 41.8 bu. per acre.  They
estimate 2006/07 ending stocks at  570 mil.bu. vs. the USDA August estimate
of 450 mil.bu.

-- Another report out of Brazil forcasting lower Soybean plantings for
2006/07, AgRural is estimating plantings at 20.7 mil. hectares vs. 22.2 mil.
last year.  They estimate Production at 50.9 to 54.1 mmt. for the 2006/07
crop.

-- USDA soy rust website reported small, isolated soybean field in Jackson
county in SE Mississippi with signs of the fungus.  This is the second
county in Mississippi to show the fungus in the 2006 growing season.

-- EPA final proposal on renewable fuel standards and renewable fuels
production credit trading scheme to be issued today.  Final rule is likely
to be issued in early 20

-- Funds all on the sell side Wednesday selling  3,000 Soybeans, 1,000
Wheat, 1,500 Meal, 3,500 Oil.

-- Soybean spreads: ABN 1,400 SX7/SX, Bunge 700 SX/SX7, 200 SX/SK, MLP 200
SF/SX.

-- Deliveries:
Soybeans  2,105  no  stopper
Meal  81  no stopper
Oil  329 Term stopped 35



Cash Markets
-- CIF Soybeans  steady  .  Sept. +50 to +54, LH Sept. +55 to +62, Oct. +59
to +61, Nov. +67 to +74, Dec. +57 to +62, Jan. +60 to +68.

-- Processors:    Decatur  -20   Danville -15   Bloomington  -35   Gibson
City  -20

-- Board Crush Margins:         Sept. 82.00  up  .65   Oct.  72.44  up  .13
Jan. 75.61  off  1.31

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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