Linn Group Morning Soybean Comment

CHICAGO - Dec 12/06 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean Update: Soybeans rallied on Monday after the release of the USDA’s
supply and demand report earlier in the day. Jan beans settled up 10 ¾ cents
higher and posted an additional 2 ¼ cents overnight. Traders say the report
was neutral but the export inspections released after the open were
favorable and helped rally the market. Shortly after the open the USDA
reported that 35.4 mil. bu of soybeans were inspected for export last week
above trade estimates for 25 to 29 mil bu. with China taking half of the
shipments. Technicians noted it was an outside day closing higher which many
believe sets the stage for further strength. Reports of short covering and
good volume as funds were net buyers of 3,500 soybeans, 2,800 meal and 1,500
oil.

Traders report state run Taiwan Sugar corp. will tender on Thursday to buy
12,000 MT of US soybeans. Reports out of china say weak soymeal demand has
slowed imports of US soybeans by China, creating a shortage of soyoil that
is supporting prices. The slow purchases come as soymeal piles up at
crushers which operated at a high rate last month to take advantage of
record soybean oil prices. Overnight Chinese soybeans and meal closed mixed.
Malaysian Palm oil futures closed higher.

Opening calls: 1 to 2 cents higher. Meal .50 higher Oil .05 to .10 higher

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSF7                669^0    2^2                   670^0    667^0

ZSH7                683^6    1^0                   685^0    681^4

ZSK7                694^0    1^2                   695^2    692^0

ZSN7                703^6    1^2                   705^0    702^0

ZMF7                191.1    0.8                    191.1    190.3

ZMH7                194.6    0.5                    194.9    194.0

ZLZ6                 28.68    -0.05                 28.68    28.68

ZLF7                 29.15    0.12                  29.18    29.04

ZLH7                 29.60    0.09                  29.63    29.50

Top News

-- Export News: Taiwan tendering for 23,000 mt. US Corn and 12,000 Soybeans
for Jan.

-- Export News: Private Taiwanese firm looking to purchase 27k-60k tons of
soybeans - Country of Origin = US/South American, Delivery = Jan-Feb

-- Soybean spreads: Fimat 5,300 SH/SF,IA 2,500 SH/SF, Caly 1,000 SH/SF, FCS
1,000 SH/SF  JPM 1,500 SF/SH, ADM 1,700 SF/SH, FCS 1,200 SF/SH, ABN 500
SF/SF, IA 500 SF/SN.

-- Fund trade moderate Monday. Funds Bought 3,500 Soybeans, 2,800 Meal,
1,500 Oil.

-- Deliveries:  Oil  325 Term put out 170; Meal  859  ADM  stopped 186

-- Chinese Soybeans, Meal and Oil futures closed higher.

Cash Markets

-- CIF Soybeans off 1-2  .  Dec. +53 to +58, LH Dec. +53 to +60,  Jan. +56
to +62, Feb. +46 to +53. Mar. +43 to +48, Apr. +31 to ??

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

-- Board Crush Margins:     Jan. 71.24 off  1.51   Mar. 68.88  up .61



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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