Linn Group Morning Soybean Comment

CHICAGO - Jan 5/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

A volatile day on Thursday in soybeans ended with March soybeans closing
down 6 ½ cents. Traders say fund liquidation continued on Thursday with
funds selling 2,500 soybeans, 3,500 Oil and bought 1,000 meal. Falling crude
oil prices over the last several sessions are pressuring all commodities and
undermining traders confidence that demand will continue for agricultural
based products such as corn and soyoil to fuel the growing biofuels
industry. Crude oil traded below $56.00 a barrel for the first time in more
than a year. Gold prices have also plummeted recently and have lost an
additional $18.00 per ounce today. Traders say this is a continuation of
trend following fund liquidation, with a 9% loss in Oil and 10% loss in
copper since Wednesday it has reinforced speculation that funds are exiting
positions.

Overnight Taiwan passed on a tender for 60 tmt option origin soybeans for
Feb/March. South American bases is under pressure with beans, meal and oil
offers all sharply lower in Brazil for Jan Shipment. Malaysian Palm oil
futures were up 2% overnight on weather concerns. The USDA reported export
sales of U.S. soybeans last week at 349,800 mt (old and new crop combined),
below a range of trade estimates for 450,000 to 650,000 mt. soymeal  at
72,600 mt(old and new crop combined), within a range of trade estimates for
50,000 to 100,000 mt. and oil at 4,700 mt, within a range of trade estimates
for 0 to 10,000 mt. Overnight Chinese soybeans closed lower, meal and oil
higher.

Opening call 2 to 4 higher

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSF7                665^4    2^6                   667^0    662^4

ZSH7                679^0    3^4                   680^2    675^4

ZSK7                693^0    3^4                   693^4    688^4

ZSN7                705^4    4^6                   705^4    702^0

ZSQ7                710^0    4^4                   710^0    708^4

ZMF7                189.3    0.7                    189.3    188.5

ZMH7                193.5    0.2                    194.6    192.8

ZMK7                197.7    1.1                    197.7    196.6

ZLF7                 28.49    0.19                  28.49    28.15

ZLH7                 28.92    0.27                  29.00    28.55

ZLK7                 29.42    0.25                  29.42    29.02

Early Opening Calls:

Top News

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

**USDA Soybeans 06/07 Export Sales Net: 338,900 mt; expected 400-700,000

**USDA Soybean Meal 06/07 Export Sales Net: 71,800 mt; expected 50-100,000

**USDA Soybean Oil 06/07 Export Sales Net: 4,700 mt; expected unch to 10,000

-- Sen. Tom Harkin introduced a bill called the Biofuels Security Act of
2007. The bill would increase the Renewable Fuels Standard to 30 bil.
gallons per year by 2020 and 60 bil. gallons by 2030. The present RFS is set
at 7.5 bil. gallons by 2012.

-- Informa is expected to release production estimates today.

-- India Sept/Oct vegoil imports were 20% higher than year ago figure of
890,000 mt; reduced duties helped drive demand.-- Malaysian reversed 3 day
downward trend and rose 2% on Friday.

-- Crude Oil trading lower: $55.35 off .24

-- The Dollar is trading lower vs. most of the major currencies this
morning.

-- Chinese Corn, Meal and Oil futures closed higher overnight while Soybeans
closed lower.

-- Soybean spreads: Term 600 SH/SN, Bunge 500 SN/SH, Man 500 SH/SK, Rose 300
SK/SH-- Volume picked up late in the session Thursday along with Fund
selling 2,500 Soybeans, 3,500 Oil. Bought 1,000 Meal.

Cash Markets

-- CIF Soybeans:  Jan. +32 to +38, LH Jan. +36 to +41, Feb. +39 to +44, Mar.
+41 to  +47, Apr. +42 to +47, May. +30 to +40

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

-- Board Crush Margins:  Jan.  63.47  up  4.41      Mar.  64.91  up  3.75



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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