Linn Group Morning Soybean Comment

CHICAGO - Nov 2/06 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean Update: Soybeans once again made new highs up 14 cents in the
January contract going to highs not seen since mid August 2005. January
soybeans added an additional 7 ¼ cents overnight. Traders say that once
again the rally was technically driven traders said with funds ending the
day net buyers of 5,300 soybeans, 4,200 meal and 5,000 Oil. This puts
estimates of fund length to approximately 46,000 soybeans, 1,800 meal and
40,000 oil. This represents a nearly 100,000 contract swing from a net short
position to a net long position in the last 30 days for soybeans. Reports
surfaced from the trading floor of new money flows into index funds.
Speculation is that it is rebalancing others say it is new fund buying.
Analysts report that farmers will have to plant 10 million more acres of
corn in 2007 to meet expected demand and traders say this is seen as a
supportive long term scenario to soybeans as it will cut into available
soybean acreage.

The USDA released its weekly export sales today and said export sales of
U.S. soybeans last week totaled 640,200 mt. within trade estimates for
550,000 to 750,000 mt. Meal sales of 58,300 mt., below trade estimates for
75,000 to 150,000 mt., soybean oil sales totaled 58,300 mt., below trade
estimates for 75,000 to 150,000 mt. South Korea re-issued a tender to buy
50,000 mt of non GMO Soybeans. FC Stone released their November production
estimates and show Soybean yields at 3.268 bil. bu. and Informa economics
released their crop production estimates today at 3.246 bil. bu both
estimates are higher than the USDA estimate of 3.189 bil. bu. Overnght
Malaysian palm oil futures closed higher.

Opening call: 7 to 10 cents higher.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSX6                 653^0    8^0                   654^6    645^2

ZSF7                665^6    7^4                   668^0    658^0

ZSH7                676^0    8^0                   678^4    668^0

ZSK7                681^2    7^6                   683^6    673^0

ZSN7                691^4    12^0                  691^4    679^4

ZMZ6                195.6    2.5                    199.0    193.6

ZMF7                196.6    3.5                    199.5    195.0

ZMH7                199.0    3.7                    200.1    197.0

ZLZ6                 27.74    0.27                  27.74    27.44

ZLF7                 28.09    0.29                  28.09    27.80

ZLH7                 28.22    0.05                  28.22    28.22

Early Opening Calls: higher 7 to 10c

Top News

**USDA Export Sales**

--USDA Soybeans 06/07 Export Sales Net: 640,200 mt; expected 600-800k

--USDA Soybean Meal 06/07 Export Sales Net: 57,700 mt

--USDA Soybean Oil 06/07 Export Sales Net: 5,800 mt

**Private Forecaster Estimates**

--FC Stone Nov Soybean Crop Production Estimate:  3.268 billion bushels

--FC Stone Nov Soybean Crop Yield Estimate:  43.9 bushels per acre

--US Nov Informa US Soybean Production estimated by Informa at 3.246 bln bu

--US Nov Informa Soybean Yield Estimate:  43.6 bpa - sources report

-- US Census Bureau places Sept soyoil stocks at 2.968 bln lbs down from Aug
final figure of 3.061 bln lbs

-- Export News: South Korea tendering for 50,000 mt. US non GMO Soybeans for
Jan.

-- Chinese think tank director says China hopes by 2010 to use 11.0 mln T
biodiesel & 6.7 mln T of ethanol to meet its growing fuel demand. The
combined renewable fuels demand of 17.7 mln T would meet 10% of expected
demand.

-- Deliveries: Soybeans 617 thru 10/27/06; ADM stopped  546

-- Funds shifted back to the buy side Wednesday buying 5,000 Soybeans, 4,000
Meal, 5,000 Oil.

-- Open interest in Soybeans up 1,885

-- Soybean spreads: ABN 1,400 SX7/SN, 800 SF/SX, JPM 700 SF/SX, Tenco 400
SF/SN, ADM 600 SX/SF, 400 SH/SX, 300 SK/SF, Bunge 400 SN/SF, Man 400 SN/SX7,
RJ 300 SX/SF.

Cash Markets

-- CIF Soybeans up 2-3  Nov. +50 to +54, LH Nov. +54 to +58, Dec. +59 to
+63, Jan. +62 to +66, Feb. +53 to +60. Mar. +42 to +47

--Processors:    Decatur  -10F    Danville -5   Bloomington  -14F  Gibson
City  -14F

--Board Crush Margins:     Nov.  81.99 off  .01   Jan. 72.37  off  1.35
Mar. 71.53  up .03



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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