Linn Group Morning Soybean Comment

CHICAGO - Jan 18/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

March Soybeans closed at a new contract high on Wednesday. Volume was large
across the soy complex with beans trading an estimated 130,260 futures and
34,720 options. Traders say not only are soybeans working to keep pace with
corn which made 10 year highs Wednesday but now there is talk of to much
moisture in Northern Brazil and some dryness in Southern Argentina. Traders
say Meal was a leader Wednesday gaining $5.70 and setting a new contract
high while Oil struggled. Funds were active Wednesday buying 6,000 Soybeans,
4,500 Meal and 4,000 Oil.

Overnight, March beans rallied again to end the night session up an
additional 7 ½ cents  to 729 ½ and early opening calls are in line with
that. Technical traders point to a new range now between 750 and 700 for
March soybeans. U.S. soybean basis offers held steady on Wednesday despite
rallies in futures and slow export demand. Brazil was offering soybeans for
April shipment at 8 cents over CBOT May soybeans. Recent rains in Brazil
have sparked more outbreaks fo rust but traders say they do not expect a
large impact on yields with harvest already under way. Overnight Chinese
soybeans, meal and oil futures closed higher. Malaysian Palm oil futures
closed lower overnight.

Opening call 5 to 7 higher.

CBOT Overnight

Contract            Last      Net Change       High      Low

ZSH7                729^4    7^4                   732^0    722^6

ZSK7                744^0    7^6                   749^0    736^2

ZSN7                756^6    6^6                   760^0    750^0

ZMH7                215.7    1.9                    216.8    213.5

ZMK7                221.0    2.8                    222.0    219.2

ZMN7                225.2    3.0                    225.2    222.3

ZLH7                 29.14    0.17                  29.22    28.90

ZLK7                 29.46    0.00                  29.63    29.46

ZLN7                 29.90    0.01                  29.91    29.90

Top News

**USDA Ag Export Sales delayed until Friday at 7:30 am due to Monday's MLK
Holiday

-- The Argentine government issued a report raising the area planted to
Soybeans to  16.05 mil. hectares vs. the previous estimate of 16.0 mil.

-- Funds all on the buy side Wednesday buying 6,000 Soybeans, 4,500 Meal and
4,000 Oil.

-- The Chinese government will be holding meetings Friday and Saturday to
map out reforms to the financial sector. Analyst look for changes in
currency policy that may let the Yuan appreciate more rapidly than in the
past.

-- Chinese Soybean, Meal, oil and Corn futures closed higher.

-- Soybean spreads: ABN 600 SX/SH, IA 500 SH/SN, Tenco 400 SN/SX, Man 400
SF/SX

-- Canadian farmers likely to plant 10% more canola acres, 20% more barley -
and 11% less wheat and 38% less flax as a result, acc. to analysts

Cash Markets

-- CIF Soybeans:   LH Jan. +32 to +36, Feb. +34 to +43, Mar. +38 to +43,
Apr. +30 to +38, May. +30 to +40

-- Processors: Decatur  -20   Danville –22   Bloomington –15  Gibson City
-20

-- Board Crush Margins:   Mar.  67.03  up 1.02          May  67.85  up 2.18



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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