Linn Group Morning Soybean Comment

CHICAGO - Dec 13/06 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean Update: Soybeans ended lower by 3 ¾ cents in the January contract on
Tuesday. Traders describe it as a whipsaw market as beans moved to a new six
day high early in the session but could not maintain its upside and drifted
lower into the close. Volume was heavy with over 124,000 contracts traded.
The products were mostly weaker with soybean oil losing ground to soybean
meal. Traders say the market overall was correcting after Mondays run-up.
Funds on Tuesday were net sellers of 1,200 meal, 1,500 Oil and even in
Soybeans.

Many traders say the market has begun to turn its attention to South America
where the soybean crop is in its early phases. Traders say there is some
concern of hot dry weather in southern Brazil where hot dry weather has
depleted soil moisture in the last two weeks and talk of increasing stress
on developing soybeans. Values at the US gulf fell on Tuesday which traders
say is reflective of increased country movement. Oil World said US soy
exports are likely to rise to 10.81 mil. mt. from December 2006 to February
2007 from 8.46 mil. mt during the same time a year ago. They also say that
Brazilian and Argentine supplies soybeans are increasingly tight. Early
calls are lower on what traders say is follow through weakness from the
overnight session. Overnight Chinese soybeans and meal closed lower.
Malaysian Palm Oil closed flat to weak.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSF7                659^6    -3^2                  662^4    658^6

ZSH7                674^2    -4^2                  677^0    673^6

ZSK7                686^0    -4^0                  689^4    685^6

ZSN7                697^0    -3^2                  699^6    696^6

ZMF7                189.0    -0.9                   189.7    188.9

ZMH7                192.8    -1.1                   193.9    192.8

ZLF7                 28.56    -0.13                 28.69    28.55

ZLH7                 29.02    -0.12                 29.15    29.01

Opening Calls: 2 to 3 cents lower

Top News

-- Export News: Taiwan passed on a tender for 60,000 mt. US or SA Soybeans
for Jan/Feb.

-- Export News: Israel buys an unknown composition of soybean meal and corn
products from US, 40,000 tons total.

-- USDA Ag Secretary Johanns told reporters Tuesday US crop out put would be
affected just modestly if land is released from the CRP program.

-- Thursday morning Informa  is expected to release new estimates for US
Corn and Soybean acres for the 2006/07 season.

-- Oct Ag exports rose in October, $1.55 mln on higher corn, soybean &
animal feed sales, according to the US Commerce department.  October Ag
exports totaled $6.83 bln.

-- Nov NOPA soybean crush is expected on Thursday morning. Look for a slight
reduction from 155 mil in Oct.

-- China commerce dept has drafted a rule that requires importers to report
bean and meal imports. This is not a license but only a report of activity.
Domestic meal stocks appear burdensome and may limit JFM bean imports.

-- Soybean spreads: ADM 3,700 SF/SH, JPM 2,800 SF/SH, Tenco 500 SF/SH, IA
500 SF/SH  Fimat 3,000 SH/SF, FCS 1,000 SH/SF, Calyon 1,000 SH/SF, Tenco 500
SX/SN, Rose 400 SN/SX

-- Malaysian palm oil futures lower overnight; concerns over rising stock &
lower CBOT soyoil prices.

Cash Markets

-- CIF Soybeans off 1-4.  Dec. +52 to +56, LH Dec. +52 to +60,  Jan. +56 to
+60, Feb. +46 to +50. Mar. +44 to +49, Apr. +31 to ??

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

-- Board Crush Margins:     Jan. 70.37 off  .87   Mar. 68.62  off  .26



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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