Linn Group Morning Soybean Comment

CHICAGO - Feb 13/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

March Soybeans closed 4 cents lower after 4 consecutive days of higher
closes. Trader say the weakness in soybeans on Monday is mostly due to
weakness in soybean oil. Given the expanded use of oilseeds and grains to
make fuel, food commodities like soybeans and soy oil tend to follow the
energy markets. Crude lost approximately $ 2.00 per barrel yesterday which
pressured outside alternative fuel markets. Trade was active on Monday with
an estimated 107,000 contracts traded. Traders also indicate soybeans may
have been due a correction from Fridays 1 ½ year high. Funds on Monday sold
approximately 2,500 soybeans, 3,000 oil and bought 1,400 meal.

Brazilian soybean harvest is 5% complete according to analyst Celeres. They
noted heavy rains in Mato Grosso have slowed harvest and is starting to
effect quality. Celeres also estimates producers have sold 42% of the crop
vs. 48% last year at this time and 45% average. The Buenos Grain exchange
estimated soybean production at a record 44.3 mmt. Overnight Chinese Soybean
futures closed mixed to lower, Meal closed lower. Malaysian Palm oil futures
closed mixed.

eCBOT Overnight

Contract            Last      Change High      Low

ZSH7                746^0    0^6       747^0    743^2

ZSK7                762^4    0^6       762^4    759^0

ZSN7                775^4    1^0       775^4    773^2

ZSQ7                781^0    0^0       781^0    779^2

ZMH7                219.0    0.1        219.0    218.1

ZMK7                223.5    -0.1       223.8    223.0

ZMN7                226.9    -0.8       227.4    226.9

ZLH7                 29.97    0.08      30.09    29.84

ZLK7                 30.44    0.00      30.57    30.41

ZLN7                 30.88    0.00      30.88    30.80

Early Opening Calls:  Steady to 1 cent higher.

Early Opening Calls (Meal/Oil):  Mixed to Slightly Better.

Top News:

-- Export News:  The Philippines purchased 84,500 tons of soy meal from
Argentina overnight, acc to traders - shipment in May or June

-- Asian soybean rust invades Santa Fe province in Argentina - first time
this has occurred in the growing season - soybeans at critical time in
development, acc. to gov. sources

-- French producers respond to biofuel demand:  winter rapeseed acreage seen
up +12% to 3.85 mil acres, acc. to French SCEES

-- Brazil new crop soybean sales:  +1% over last week to 42% total, but
still -6% off of last year, acc. to Celeres

-- Malaysian palm oil was mostly steady overnight, finishing $1-2 lower to
$539/ton, mostly due to minor weakness in soy oil, acc. to Malay sources

-- Asian holiday, comparatively high prices, likely to put a damper on Asian
grain demand this week. acc. to analysts

-- The USDA will release new 10 year agricultural projections Wednesday.
These projections are developed by interagency committees and are not actual
surveys.

-- Irrigation, increase in areas seeded to sugarcane, could lead Brazil to
export 53 billion gallons of ethanol in ~20 years, acc. to trade sources

-- Fund trade slowed from Friday’s pace and was mostly on the sell side.
Monday Funds  sold 2,000 Corn, 2,500 Soybeans, 2,000 Wheat, 3,000 Oil.
Bought 1,400 Meal.

-- Port congestion in Australia, strong grain harvest in Argentina and
Brazil boost spot freight rates for Asian route - up 3% from last week to
$36k - $37/day.

-- Soybean spreads: Term 800 SH/SK, FCS 400 SH/SK, RJ 500 SK/SH, Fortis 800
SK/SH

-- Outside Markets:  Gold up  $3.00, Crude Oil steady @ $57.80, Dollar
trading lower

Cash Markets:

Cash markets were steady to weaker.

CIF Soybeans:  Feb. +30 to +36, LH Feb. +30 to +36,  Mar. +30 to +36, Apr.
+19 to +25, May. +19 to +25, June +19 to +25.

River house bids weaker STL  off 1 at -11. Morris IL. River  steady –31,
Havana off 3 at –31.

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

Board Crush Margins:   Mar.  65.12 up  1.25        May  65.01  up  .23



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.