Linn Group Morning Soybean Comment

CHICAGO - Oct 5/06 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean Update: An overall grain rally on Wednesday at the CBOT led by wheat
brought soybeans to the upper end of their range closing 12 ¾ cents higher.
Traders say the harvest of a potential record large U.S. soybean crop should
limit advances. Technical traders continue to point to a range of 560 to 540
and say the market needs to prove itself with a close above or below this
area to indicate any sustained trend. As one trader was quoted "with corn
and soybeans rallying you wouldn't believe we are in harvest, it must be
fund buying driving this market". Traders report money inflows into grain
markets as funds are getting out of energy and buying grains. The USDA said
export sales of U.S. soy last week totaled 1,254,800 mt., above trade
estimates for 700,000 to 900,000.mt. Soybean basis bids were mostly steady
with scattered moderate selling. Funds were on the buy side in all grain
markets buying 4,000 Soybeans, 5,000 Meal and 2,000 Oil. Overnight Malaysian
Palm oil futures closed higher.



eCBOT Overnight
Contract            Last      Net Change       High      Low
ZSX6                 556^0    0^6                   557^2    554^0
ZSF7                570^6    1^2                   571^4    568^4
ZSH7                582^2    1^2                   582^4    579^6
ZSK7                590^4    2^0                   591^0    587^6
ZSN7                598^0    -0^4                  600^0    598^0
ZMV6                164.9    -0.1                   164.9    164.9
ZMZ6                167.2    0.1                    167.7    166.7
ZMF7                167.8    0.0                    168.1    167.8
ZLV6                 23.59    0.07                  23.60    23.48
ZLZ6                 23.91    0.11                  23.95    23.76


Early Opening Calls: 1 to 2 cents higher.

Top News
**USDA Soybeans 06/07 Export Sales Net: 1.194 mln mt; estimated range
Soybeans  600,000 - 900,000
**USDA Soybean Meal 06/07 Export Sales Net: 16,900 mt; estimated range 0 -
75,000
**USDA Soybean Oil 06/07 Export Sales Net: 700 mt; estimated range 0 -10,000

**Informa US October Soybean Yield Estimate:  43.4 bpa
**Informa US October Soybean Production:  3.206 bil bushels

**Stats Canada: Canola production at 8.94 mln T vs 9.66 mln T in '05
**Stats Canada: Soybean production at 3.29 mln T vs 3.16 mln T in '05

-- US Census Bureau released statistics showing soybean oil stocks at 3.042
billion pounds.  This is revised higher from their estimate one week ago,
and lower than the recorded amount in July, which was 3.106 billion pounds.
-- The preliminary report shows Soybeans open interest Wednesday up 3,489.
-- Funds bought 4,000 Soybeans, 5,000 Meal and 2,000 Oil.
-- Soybean spreads: ADM 1,100 SX/SF, Tenco 300 SX/SF, 300 SX/SN, Fimat 500
SF/SX.
-- OPEC's President suggest 1 mln bpd crude oil production is "in line with
market fundamentals".  These comments came amid market talk that the price
fixing cartel would hold an emergency meeting over market conditions.


Cash Markets
-- CIF Soybeans up 1-2. Oct. +59 to +62, LH Oct. +62 to +66, Nov. +68 to
+73, Dec. +59 to +63, Jan. +63 to +68.

-- Processors:    Decatur  -15    Danville -20   Bloomington  -30   Gibson
City  -20

-- Board Crush Margins:     Oct.  66.47 up  .01   Dec. 74.17  off  1.64
Jan. 65.97  off  1.58

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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