Linn Group Morning Soybean Comment

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

Soybean Update: Soybeans gapped lower on the open on Monday and did not look
back, closing 17 ¾ cents lower. The weakness continued overnight as the
January contract lost an additional 3 ¼ cents overnight. Traders say the
market is being pressured by weakness in corn and soybean oil and prospects
for a bigger than expected Brazilian soybean crop. Additional bearishness is
coming from talk that the USDA is considering making it easier for farmers
to take land out of the conservation reserve program so they can plant more
corn next spring to meet demand. This offers bearish implications to
soybeans as well traders say.

Volume in soybeans were heavy on Monday in soybeans and products. Funds sold
4,000 soybeans, 3,000 meal and 1,500 oil. The USDA reported last week’s
export inspections of soybeans at 33.4 mil. bu., near estimates for 27 to 33
mil. bu. Spot basis bids for soybeans in the Midwest were steady to firm
late Monday. Overnight Chinese soybeans, Oil and Meal all closed lower.
Malaysian palm oil futures closed weak.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSF7                656^0    -3^2                  659^0    655^2

ZSH7                671^0    -2^4                  673^0    669^2

ZSK7                682^0    -1^2                  682^4    679^2

ZSN7                691^0    -2^4                  692^4    689^6

ZMZ6                182.8    -0.5                   182.8    182.8

ZMF7                185.9    0.2                    186.5    184.7

ZMH7                189.7    0.3                    190.4    188.6

ZLZ6                 28.70    -0.20                 28.80    28.70

ZLF7                 29.10    -0.24                 29.33    29.05

ZLH7                 29.52    -0.26                 29.75    29.49

  Opening Calls: Lower 2 to 3 cents

Top News

-- USDA reports private sale of 120,000 mt of 06/07 US soybeans sold to
Japan

-- Funds a little more aggressive selling 4,000 Soybeans, 3,500 Meal, 1,000
Oil.

-- A couple of new Brazil Soybean production estimates out yesterday.
Brazil’s Veg Oil Industry Association issued a estimate  of 55.2 mmt vs.
their October  estimate of  54.7 mmt. Brazil grain analyst Celeres issued a
estimate of 54.5 mmt. vs. their November estimate of 53.7 mmt.

-- The Argentine Grain exchange said Soybean planting was estimated at 64%
complete vs. 66% last year.-- Soybean spreads: ADM 3,000 SF/SH, JPM 1,000
SF/SH, Tenco 1,200 SN/SX

Cash Markets

-- CIF Soybeans up 1 to 2.  Dec. +61 to +62, LH Dec. +61 to +63,  Jan. +63
to +64, Feb. +50 to +52. Mar. +45 to +48, Apr. +32 to ??

-- Processors:    Decatur  -5    Danville -10   Bloomington  -8  Gibson City
-10

-- Board Crush Margins:     Jan. 72.03 up  3.78   Mar. 70.76 up  3.65



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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