Linn Group Morning Soybean Comment

CHICAGO - Feb 6/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Another new high close in March Soybeans on Monday only 4 ½ cents off the
highs. This is the sixth new contract high in the last 3 weeks. Oil also
posted new contract highs ending 25 points higher while meal settled
slightly lower. Strong export inspections kept the market firm all day. The
USDA said 35.6 mil. bu. of US soybeans were inspected for export last week,
above trade estimates for 26 mil to 31 mil bu.  Traders say the market
continued to digest the Pro Farmer survey which says planted bean acreage
could be down as much as 9.5 mil acres due to an increase in corn acreage
planting. There are also some prospects for Brazilian soybean acreage to
drop next year as producers may shift more of their land into sugar cane to
meet the growing ethanol industry in South America. Fund activity on Monday
shows funds buying 3,000 Soybeans, 3,000 Oil and 500 meal.

The USDA issued crop production estimates for the new budget on Monday and
projected that this years soybean crop at 2.9 bil. bu with Soybean Acres
estimated at 71.0 mil acres vs. last years 75.5 mil acres a decrease of 4.5
mil acres. China continues to show interest in South American Soybeans and
Japan has joined the Chinese looking to buy South American Soybeans. Brazil
Soybean new crop bean basis is 15 to 19 cents lower than US and Argentina is
at 36 cents lower. Overnight Chinese Soybean futures closed lower, Meal
higher and oil mixed. Malaysian Palm oil futures closed lower giving back
Mondays gains.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZWH7               457^4    -1^0                  459^0    456^2

ZWK7               471^0    -1^4                  473^0    470^0

ZWN7               480^0    -0^4                  481^4    478^6

ZWU7               486^2    -1^2                  486^2    486^2

KEH7                485^4    0^2                   486^0    484^4

KEK7                494^4    -1^4                  494^4    494^4

KEN7                497^2    -1^2                  498^4    497^2

MWEH7                        491^4    -0^6                  493^0    491^4

 Opening Calls: ½ to 1 cent higher.

Top News

-- 2007 USDA Budget Projections:  Soybeans:  Production = 2.9 billion bu,
Planted Acres = 71 mil - decrease of -4.5 mil acres from '06

-- Brazil soybean sales ahead 3% points to 41% when compared to last week;
yea ago figures = 47%; 5 yr avg = 45%, according to crop forecaster Celeres

-- Hedge funds reportedly buy two Minnesota grain elevators, potentially
seeking to enter grain delivery market, acc. to a ConAgra spokesperson

-- Bitterly cold weather in the United States, and possibly EU as well, lead
crude to the verge of $60/barrel - currently trading at 59.80, 11 cents off
the high of the trade

-- Soybean spreads: JPM 500 SH/SK, ABN 300 SX/SN, Tenco 200 SX/SN, Man 200
SK/SH.

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

Cash Markets

-- CIF Soybeans:  Feb. +23 to +31, LH Feb. +25 to +35,  Mar. +30 to +37,
Apr. +15 to +25, May. +15 to +25, June +19 to +25.

-- Processors: Decatur  -18   Danville –20   Bloomington –20  Gibson City
-20

-- Board Crush Margins:   Mar.  64.10 off  1.16        May  63.00  off  .81



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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