Linn Group Morning Soybean Comment

CHICAGO - Nov 16/06 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean Update: Soybeans went on the defensive on Wednesday closing down 7 ½
cents in the January contract after trading in a 16 cent range. Traders say
soybeans again followed corn and the market was technically weak. Traders
say the market rallied initially after the Malaysian palm oil futures closed
at 2 year highs. Basis bids for soybeans were steady but farmer selling is
slow underpinning basis levels. Volume in the soybeans was moderate but
soybean oil volume was heavy. Funds on Wednesday were even in Soybeans
bought 2,000 Oil and sold 1,000 meal.

Traders say soybean export demand remains weak due to few purchases by
China. Reports show China has slowed soybean purchases due to weaker
crushing margins due to high prices for soybeans. Rising domestic Chinese
corn prices are helping to push up soymeal prices and helping to raise
crushing margins in recent days. Cash traders say most buyers are unwilling
to pay current high prices with prospects for large soybean crops in a few
months in South America. Weekly export sales released this morning came in
at 755,700 mt. at the upper range of estimates of 555,000 to 800,000 mt.
Argentine Ag. Secretary issued a new estimate for Soybean plantings at 15.9
mil. hectares vs. estimate of 15.6 mil. hectares. Iran purchased 70,000 mt
of Brazilian soybean oil. Chinese Soybeans, meal and oil all closed higher.
Malaysian palm oil futures closed mixed to weak.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSF7                668^6    5^0                   669^0    662^4

ZSH7                680^4    4^4                   680^4    675^0

ZSK7                689^0    4^6                   689^6    684^4

ZSN7                697^0    3^6                   697^2    692^0

ZMZ6                193.8    1.3                    193.8    192.3

ZMF7                194.8    1.4                    194.9    193.4

ZMH7                195.8    -0.3                   195.8    195.7

ZLZ6                 28.57    0.18                  28.60    28.39

ZLF7                 28.95    0.13                  28.98    28.78

Opening Calls: higher 3 to 5

Top News

**USDA Soybeans 06/07 Export Sales Net: 755,700 mt; expected 550-750,000

**USDA Soybean Meal 06/07 Export Sales Net: 132,700 mt

**USDA Soybean Oil 06/07 Export Sales Net: 18,000 mt

-- Export News: USDA reports sale of 115,000 mt of 06/07 soybeans to
'unknown'

-- Funds reportedly Sold 2,500 Oil, 800 Meal. While they were 'even' for the
day in Soybeans.

-- The Argentine Ag Secretariat issued a new estimate for Soybean plantings
at 15.9 mil. hectares vs. their previous estimate of 15.6 mil. hectares.
They also raised their Wheat production estimate to 13.6 mmt. vs, their
previous estimate of  13.5 mmt.

-- 70,000 t of Brazil soyoil bought by state run Iran purchasing agency
according to traders.  The purchase was for 2x35,000 mt for shipment in Dec
& Jan.

-- Yum Brands, Taco Bell US restuarants, will convert to zero gram trans fat
canola oil for its frying needs, dropping partially hydrogenated soybean
oil.

-- Chinese customs data shows imports of soybeans in Oct '06 totaled 2.25
mln T.  Meanwhile, in the first 10 months of 2006, a total of 23.5 mln T of
beans had been imported, a rise of 9.7% when compared to the same period
year ago.

-- Malyasian crude palm futures were lower; traders cite good exports and
wet weather production concerns lead to the profit taking.

Cash Markets

-- CIF Soybeans steady up 2.  Nov. +44 to +47, Dec. +52 to +56, Jan. +55 to
+60, Feb. +45 to +53. Mar. +40 to +48

-- Processors:    Decatur  -10F    Danville -15   Bloomington  -14F  Gibson
City  -14F

-- Board Crush Margins:     Jan. 78.75 up  .68   Mar. 75.74 up  1.79



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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