Linn Group Morning Soybean Comment

CHICAGO - Jan 19/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

After making new contract highs March soybeans were unable to sustain their
gains closing 5 ¾ cents lower. Traders say profit taking and a weak bean oil
market pressured the soybean complex. Soybean oil market has been influenced
by crude oil and with plummeting prices in crude the bean oil market has had
difficulty keeping pace with the rallying soybean market. Thursday’s volume
was heavy with an estimated 111,232 futures traded and 34,101 options.
Traders say Soybeans were due a correction after reaching 1 ½ year highs
overnight. Funds on Thursday sold 4,000 Soybeans, 2,000 Meal and 800 Oil.
Traders say Index fund selling has ended for the most part.

The USDA released the weekly export sales number this morning. Soybean
export sales came in at 1,095,700 mt. well above analyst’s expectations of
500,000 to 700,000 mt. Bean oil exports at 15,500 mt. of bean oil above
estimates of 5,000 to 15,000 mt. and meal sales of 221,200 mt. above
estimates of 75,000 to 125,000 mt. Nearby soybean basis levels are
declining. Lower barge freight and farmer selling and lack of export demand
are pressuring basis values. Technically the soybeans are trading above all
key moving averages and technicians point to key ranges of 700 to 750.
Traders say a close above 750 could give us price projections over $8.00.
Overnight Chinese soybean, meal and Oil futures closed lower. Malaysian palm
oil futures closed down1.6% .

Opening call: steady.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSH7                716^6    0^4                   718^0    712^4

ZSK7                725^2    -6^0                  732^0    724^6

ZSN7                745^6    0^4                   745^6    741^6

ZMH7                209.5    -1.8                   211.3    209.4

ZMK7                215.0    -0.3                   215.3    213.6

ZLH7                 28.65    -0.17                 28.86    28.65

ZLK7                 29.13    -0.18                 29.40    29.13

Early Opening Calls: 2 to 3c lower

Top News

**USDA Soybeans 06/07 Export Sales Net: 1.095 mln mt; expected 500-700,000

**USDA Soybean Meal 06/07 Export Sales Net: 221,200 mt; expected 75,125,000

**USDA Soybean Oil 06/07 Export Sales Net: 15,500 mt; expected 5-15,000

-- Informa acreage report anticipated at 10:30 this morning, could change
trade for the better or the worse

-- Export News: Israel tendering for 14,000 mt. Meal

-- Soybean open interest Thursday up 8,066.

-- Soybean spreads: Tenco 600 SN/SX, Bunge 400 SK/SH, Fortis 400 SN/SK, RJ
200 SH/SK

-- Chinese Soybean, Corn, Meal and Oil futures closed lower.

-- Malaysian palm oil closes lower -1.6% overnight to $536/ton, on weather
improvements and the decrease in price of substitutes

Cash Markets

-- CIF Soybeans:   LH Jan. +25 to +29, Feb. +28 to +35, Mar. +32 to +37,
Apr. +30 to +35, May. +30 to +35

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

*       Board Crush Margins: Mar. 65.63 off 1.40; May 64.82 off 3.03



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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