Linn Group Morning Soybean Comment

CHICAGO - Dec 6/06 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean Update: Soybeans closed  a nickel higher in the January contract but
were unable to close the gap left by Mondays opening. Meal was the product
leader ending $2.10 higher and oil unchanged. Funds were net buyers of
Soybeans buying 2,000 soybeans, 1,200 meal and flat in oil. Traders say a
firm dollar and a weak gold market are bearish for the Soybean complex as
well as year end profit taking by investment funds. Overnight soybeans
declined 6 ½ cents in the January contract. Chinese soybeans, meal and oil
closed mixed.

Reports of barge basis values declining due to a sharp fall in barge
freight. Traders say the barge market is being pressured by a lack of grain
moving and recent rains improving river conditions allowing bigger barges to
navigate the Mississippi river. Traders also not it is the end of the barge
season and operators are preparing to remove barges from the upper
Mississippi river.  The USDA announced that China bought 120,000 MT. of US
soybeans. Private exporters reported the sale of 120,000 MT. of U.S.
soybeans to an unknown buyer for delivery this marketing year, the
Agriculture Department said Wednesday. The U.S. Senate rejected $4.8 billion
in disaster aid for U.S. farmers and ranchers on Tuesday, despite pleas that
tens of thousands of producers could go broke without help. Advocates vowed
to try again next year, when Democrats control Congress and lawmakers try to
wrap up work on bills to fund most of the federal government. The White
House has threatened to veto disaster aid.

Opening calls: 5 to 7 lower.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSF7                657^6    -6^4                  664^6    655^4

ZSH7                671^4    -6^2                  678^0    669^0

ZSK7                680^0    -7^4                  687^0    678^4

ZSN7                690^0    -5^6                  695^6    688^6

ZMZ6                183.4    -0.9                   184.0    183.4

ZMF7                186.5    -1.3                   188.3    186.4

ZMH7                190.0    -0.9                   191.0    189.8

ZLZ6                 28.67    -0.25                 28.71    28.67

ZLF7                 29.10    -0.24                 29.37    29.09

ZLH7                 29.56    -0.18                 29.67    29.55

Top News

-- Export News: USDA reports private sale of 120,00 mt of US Soybeans sold
to unknown destination

-- Export News: Feed Assoc in S Korea bought 220,000 mt of South American
soymeal, split into 4 purchase covering May thru July delivery.

-- Chinese NGOIC:  expectes 2007 Soybeans production up +0.7% to 15.6 mil
tons

-- Fund trade mixed Tuesday. Funds Bought  2,000 Soybeans, 1,000 Meal. Even
Oil.

-- Deliveries: Meal 975 thru 12/5/06 no stopper; Oil 2,074 thru 12/5/06 Term
stopped 419

-- Soybean spreads: Term 800 SF/SH, Fimat 800 SH/SF, Ocon 700 SF/SN, ADM 400
SF/SH

-- Supporters in the US Senate of farm disaster aid covering 2005 & 2006
losses fell short of bringing the aid forward and the matter will have to
wait until the new Congress convenes in January 2007

-- CFTC announces in press release "Supplemental Report" to weekly
Commitment of Traders beginning Jan. 2007. The new report will show
aggregate futures and options positions of Noncommercial, Commercial and
Index Traders in 12 selected agricultural commodities. Positions reported in
the new “Index Traders” category will be drawn from both the current
Noncommercial and the Commercial categories. Coming from the Noncommercial
category will be positions of managed funds, pension funds and other
institutional investors that generally seek exposure to commodity prices as
an asset class in an unleveraged and passively-managed manner using a
standardized commodity index. Coming from the Commercial category will be
positions of entities whose trading predominantly reflects hedging of
over-the-counter (OTC) transactions

Cash Markets

-- CIF Soybeans up 1.  Dec. +60 to +63, LH Dec. +61 to +64,  Jan. +62 to
+65, Feb. +50 to +55. Mar. +45 to +48, Apr. +32 to ??

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

-- Board Crush Margins:     Jan. 71.65 off  .38   Mar. 69.37 off  1.39



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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