Linn Group Morning Soybean Comment

CHICAGO - Jan 17/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybeans gave back some of Fridays gains Tuesday closing 8 cents lower in
the March Contract. Soybeans opened higher and struggled for the remainder
of the day. Traders say with corn coming off a limit up opening caused
weakness across the grain floor as soybeans are tracking corn. Traders also
say that some of the break is on profit taking from Friday's big rally.
Technicians point to support for the March Soybean contract from $6.90 to
$7.00. Volume was heavy on Tuesday after the three day trading break due to
the MLK holiday. Soybean volume was estimated at 136,328 futures and 32,383
options. Funds on Tuesday bought 1,000 Soybeans, 3,000 Oil and even in meal.

According to a report by Reuters this morning South Korea's demand for
soybeans in 2007 may fall 5% due to a weaker appetite for soybean oil and
stiff competition form cheaper imported oil products namely Olive Oil and
grape-seed oil. The report shows imports to South Korea could be decreased
by 40,000 to 50,000 mt. Overnight Chinese Soybeans and meal closed higher,
Oil lower. Malaysian Palm oil futures closed lower. 0

Opening call 7 to 9 cents higher.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSH7                715^6    7^2                   719^0    707^4

ZSK7                730^0    6^6                   732^0    721^0

ZSN7                743^0    6^4                   745^0    735^0

ZSU7                750^0    4^0                   750^0    750^0

ZMH7                211.1    3.0                    211.5    207.2

ZMK7                216.0    3.6                    216.4    214.6

ZMN7                219.8    3.1                    220.0    215.9

ZLH7                 28.75    -0.04                 29.05    28.70

ZLK7                 29.30    0.06                  29.43    29.26

Early Opening Calls: 7 to 10c higher

Top News

-- Export News: Taiwan tendering for 50,000 mt. Corn and 14,000 Meal for
March.

-- Oil World increased it Brazil Soybean production estimate to 56 mmt. and
increased it's Argentine Soybean production estimate to 43.5 mmt.

-- High prices and cheaper alternatives lead to less demand for soybean
products in South Korea, leading many analysts to believe a 5% decline in
soybean imports to roughly 850,000 tons may be imminent.

-- CBOT said soybean & soymeal futures margin to increase beginning with
Wednesday night's electronic session.

Contract                          From                        To

                        Initial/Maintenance/Hedge  Initial/Maintenance/Hedge

    Soybean                 $1,080/$800/$800         $1,350/$1,000/$1,000

    Mini-Sized Soybean      $216/$160/$160           $270/$200/$200

    Soybean Meal            $844/$625/$625           $1,080/$800/$800

-- Goldman Sachs report Tuesday suggested fair value for Corn is now $3.98
up 30 cents from their previous estimate. They said they also see upside
risk for Soybeans.

-- Huge volume of trade in Corn Tuesday; meanwhile open interest rose 6,493
contracts in Soybeans, while volume was 71,749 electronically & 68,151
traded in the pit.

-- Malaysian palm oil futures decline -2.3% overnight to $543.70/ton, as
negative fundamentals dissipate

-- Malaysian palm oil exports off 13% in December to 1,337,671 mt compared
to November - analysts site weakening demand from food sector.

-- Jan Soybean oil issuer/stopper report: 18 contracts.

-- Fund trade a mixed bag selling 1,000 Soybeans, 3,000 Oil. They were
'even' in the Meal.

-- Soybean spreads: ABN 1,300 SX/SH, JPM 1,000 SH/SX, JPM 500 SH/SK, 500
SH/SN

Cash Markets

-- CIF Soybeans:   LH Jan. +30 to +35, Feb. +36 to +40, Mar. +39 to +44,
Apr. +30 to +40, May. +30 to +40

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

-- Board Crush Margins:   Mar.  66.01  up .74          May  65.67  up



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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