Linn Group Morning Soybean Comment

CHICAGO - Jan 4/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Commodity markets began 2007 in sell mode and soybeans were no exception.
March Soybeans ended the day down 15 ¼ cents and March beans finished the
overnight session down an additional 5 ½ cents. Traders say the weakness
began with sharply lower corn and wheat prices as corn was limit down at one
point in the day. Traders say the overall grain sell-off was mostly large
hedge fund type selling. The large sell-off was not limited to grains as
Energy markets, metals and many of the soft markets took big hits on
Wednesday. The CRB Index dropped 2.8% on the day and the Goldman Sachs Index
traded to new contract lows. Traders say to look for more fund liquidation
over the next couple of days.  Floor sources did say however that the long
only (index type fund) did not participate in the sell-off. Funds on
Wednesday sold 2,500 soybeans, 3,500 Oil and 2,500 Meal.

Favorable weather in South America and abundant stocks of soy products are
expected to continue to weigh fundamentally on the market as talk of
continued fund liquidation today persists. Technical traders warn of getting
too bearish as March soybeans traded to within 7 1/2 cents of their
contracts highs just last Friday and many expect the market to support in
the 675 area in the March contract. Reports today show Taiwan's Breakfast
Soybean Procurement Association plans to buy 27,000 to 60,000 mt of
Brazilian or U.S. soybeans. Malaysian palm oil futures slipped more than 2
percent on Thursday, pulled down by a decline in soybean oil and improving
weather in flood-hit areas of the country.

Opening call 3 to 4 lower.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSF7                663^2    -6^0                  667^0    663^2

ZSH7                676^4    -5^4                  681^0    675^6

ZSK7                690^6    -5^0                  694^2    689^4

ZSN7                702^0    -5^4                  707^4    701^2

ZMF7                186.7    -1.1                   187.8    186.0

ZMH7                191.5    -0.9                   192.6    190.3

ZMK7                195.1    -1.7                   196.1    194.1

ZLF7                 28.45    -0.20                 28.45    28.45

ZLH7                 28.86    -0.22                 29.10    28.85

ZLK7                 29.40    -0.11                 29.56    29.36

Top News

**Reminder: Weekly Export Sales delayed until Friday @ 7:30 am due to
Holiday week

-- Malaysian palm oil declined -2.2% overnight, to $545/ton, primarily on a
weather situation that continues to improve in

key production areas

-- The preliminary report shows Soybean open interest up 2,415 yesterday

-- Funds hit the sell button to start 2007. Selling 2,000 Soybeans, 3,500
Oil, 2,500 Meal.

-- The Japan Federation of Commodity Exchanges announced today that TOCOM
volume was down 49% Y/Y, and volume on all exchanges fell 18% for the year.

-- Britain’s Meteorological Office is forecasting 2007 to be the hottest
year on record worldwide.  They look for worldwide average temperatures to
push above the record set in 1998.

-- Soybean spreads: Tenco 500 SN/SX, 400 SH/SN, ABN 500 SX/SN, 400 SN/SH

-- Soybean electronic volume: 41,294; pit volume: 57,553

Cash Markets

-- CIF Soybeans:  Jan. +30 to +36, LH Jan. +35 to +38, Feb. +38 to +42, Mar.
+41 to +47, Apr. +42 to +47, May. +29 to ??

-- Processors: Decatur  -15   Danville 10   Bloomington 20  Gibson City -20

-- Board Crush Margins:  Jan.  59.06  off  1.48      Mar.  61.16  off  1.47



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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