Linn Group Morning Soybean Comment

CHICAGO - Jan 3/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

The Soybean market ended the year on a bullish note ending the session up 6
¾ cents in March soybeans. Overnight soybeans wiped out Fridays grains
ending down 8 ½ cents in light volume. March soybeans ended up 23 cents for
the week but down 3 cents for the month and 8 ¾ cents off the Yearly highs.
For the year front month soybeans ended up 81 ½ cents. Traders say that
despite burdensome supplies, the long only index funds and the idea that
vegetable oil will be in demand for bio-diesel have limited the downside for
soybeans and soy related products in 2006. Funds ended 2006 much the same
way as they started buying 3,000 Soybeans, 1,700 Meal and sold 600 Oil.

Reports from all 3 growing regions in South America show Soybean Crops
progressing well. Regular rainfall in Brazil’s growing area are helping and
farmers report the crop to be in good condition. While areas such as Rio
Grande Do Sul report needing rain, Ag. Federation president reports that
there is really nothing to worry about. The commitment of Traders report as
of December 26th shows funds long 46,601 Soybeans up 1,394, Meal long 11,480
up 833 and oil long 47,590 down 3,314. Malaysian Palm Oil futures closed
down 1.7% on Wednesday as the weather in the flooded regions has been
improving and the ringgit currency strengthened against the US dollar.

Opening call 5 to 8 cents lower.

CBOT Overnight

Contract            Last      Change High      Low

ZSF7                675^4    -8^0      682^4    675^4

ZSH7                689^0    -8^2      696^4    689^0

ZSK7                706^0    -3^4      709^6    705^0

ZSN7                715^0    -5^4      720^4    715^0

ZMF7                191.0    -0.9       191.9    191.0

ZMH7                196.0    -0.9       198.3    196.0

ZMK7                199.4    -0.3       201.0    199.4

ZLF7                 28.90    -0.36     29.24    28.90

ZLH7                 29.37    -0.33     29.84    29.37

ZLK7                 29.89    -0.25     30.25    29.89

Top News

** Tuesday's USDA Grain Inspections - Soybeans:  19,261,000 bu  (-41.0% vs.
last week, +21.8% vs. last year)

-- Grains faced a lot of pressure overnight - could be some traders believe
Funds will be sellers to start the new year and are trying to get a jump on
them? The volume of trade last night was not huge, 8,519 Corn contracts
traded.

-- Soybean sales good at 38.1 mil.bu taking year to date sales to 719
mil.bu. vs. 533 mil. sold on this date last year. Soybean sales will need to
stay strong to meet the USDA estimate as we have now sold 63% of the USDA
estimate vs. the five year average of  68 ½ %.

-- Malaysian Palm Oil futures declined -1.7% overnight to $559/ton, as
weather concerns dissipate

-- The World experienced the sixth warmest year in history in 2006.  China
had it’s hottest year since 1951.

-- Don’t forget this week the CFTC  will start the new Supplemental report
that will show positions for the Index Funds.

Cash Markets:

Cash markets did not see a lot of activity last Friday.

CIF Soybeans steady up 2.  Jan. +35 to +36, LH Jan. +36 to +40, Feb. +40 to
+42, Mar. +43 to +47, Apr. +30 to ??

Processors:    Decatur  -18H    Danville -10   Bloomington  -20H  Gibson
City  -20H

Board Crush Margins:     Jan. 60.54 up .17   Mar. 62.63 off  1.36

Transportation:  Barge freight steady  STL 205 - 215     IL. River  270  285
Ohio  185  200

            BN rail freight firmer    Jan. +50     Feb. 150   Mar. 200



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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