Linn Group Morning Soybean Comment

CHICAGO - Jan 12/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Stronger Soybean market on Thursday due to sharply higher corn prices closed
the March contract up 9 ½ cents higher. Traders say the rally was impressive
in front of the release of todays final 2006 production numbers. Volume was
moderate to light in the complex with volume estimated at 78,997 futures.
Funds bought 1,000 soybeans, 3,500 oil and 400 meal. A shutdown in the in
the ECBOT electronic system with 4 minutes left to go in the trading day
caused a breakdown in prices in the pit that was not showing up on the
screen. Traders say the Index (long only) funds had orders to sell on the
close and were unable to in the electronic side by side market and were
forced to take their orders to the pit.

Today the USDA released their final 2006 crop production numbers today  USDA
cut its 2006 U.S. soybean crop production figure to 3.188 billion bushels,
from 3.204 billion, but the new figure would still represent a record large
crop.  USDA raised U.S. soybean ending stocks by 10 million bushels, to 575
million bushels.  Traders say this is a mostly bullish bullish report and
with corn called limit bid the opening calls are for beans to be 10 to 15
higher. Overnight Chinese Soybeans, meal and Oil all traded lower. Malaysian
Palm oil futures closed

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSF7                660^0    -4^0                  662^2    660^0

ZSH7                672^6    -1^4                  674^4    670^6

ZSK7                686^0    -2^6                  688^0    686^0

ZSN7                700^2    -1^4                  701^2    698^4

ZMH7                193.4    -1.0                   194.5    193.4

ZMK7                198.0    -0.1                   198.3    197.7

ZLH7                 28.39    0.03                  28.50    28.15

ZLK7                 28.78    -0.08                 28.86    28.76

Opening Calls – 10 to 15 higher.

==USDA Reports Today==

**US Jan Soybean 06/07 Crop Prod: 3.188 bln bu.; est. 3.24; Nov Rpt 3.204

**US Jan Soybean Yield: 42.7 bpa; est. 43.5 bpa; Nov Rpt 43.0 bpa

**US Dec 1 Soybean Stocks: 2.697 bln bu.; expected 2.74; Dec 05 = 2.502 bln

**US Jan Soybean 06/07 Carryout: .575 bln bu. ; est. 0.59; Dec Rpt 0.565

**US Jan Soyoil 06/07 Carryout: 2.689 bln lbs. ; Dec Rpt 2.729

**US Jan Soymeal 06/07 Carryout: 300,000 T ; Dec Rpt 300,000 T

**Jan Argentina 06/07 Soybean Output:  42.5 mmt; Dec Rpt 42.0

**Jan Brazil 06/07 Soybean Output:  56.0 mmt; Dec Rpt 56.0

**Jan China 06/07 Soybean Output:  16.2 mmt; Dec Rpt 16.2

**World 06/07 Soybeans Carryout: 56.15 mmt; Dec Rpt 55.72

**World 06/07 Soyoil Carryout: 3.28 mmt; Dec Rpt 3.19

**World 06/07 Soymeal Carryout: 4.07 mmt; Dec Rpt 3.88

Top News

-- AIG fund selling to re-balance continued yesterday at the close selling
about 10,000 Corn and 4,000 wheat.

-- Farmer selling picked up slightly yesterday, firm barge freight rates
imply there maybe more cash activity than on the surface.

-- Malaysian palm oil down -0.6% overnight to $538/ton on profit-taking

-- Funds also bought 3,000 Wheat, 1,000 Soybeans, 3,500 Oil, 400 Meal.

-- Brazil government issued a new estimate for Soybean production at 54.9
mmt. This is up from their previous estimate of 54.7 mmt.

-- The Argentine government announced it was raising the tax on exported
Soybeans and products to 27.5% vs. the old tax of 24% effective January
15th.

-- Deliveries: Soybeans 426 no stopper Oil 129 no stopper Term put out 92
Meal 120 Bunge stopped 38 ADM 19

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

-- Soybean spreads: Fimat 600 SN/SX, JPM 500 SH/SN, Term 300 SH/SN,

-- US $ is trading lower vs. the Euro, higher vs. the Yen.

Cash Markets

-- CIF Soybeans: Jan. +33 to +36, LH Jan. +35 to +40, Feb. +39 to +43, Mar.
+40 to +45, Apr. +35 to +39, May. +35 to +39

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

-- Board Crush Margins: Jan. 62.44 off 1.23 Mar. 65.39 off .04



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/

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.