Linn Group Morning Soybean Comment

CHICAGO - Mar 5/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

The soybean market hit the brakes last week as the market failed to make a
new high for the first time in 5 weeks closing sharply lower down 40 ½ cents
for the week. A global sell-off of stocks and commodities spurred by a
sudden sell-off from the Chinese stock market sent shock waves across the
globe spurring the selling. Heavy March deliveries of soybean meal and oil
remains a bearish factor.  Fund liquidation has been substantial and Friday
was no exception with funds selling an estimated 6,000 Soybeans, 3,000 Meal
and 4,000 Oil.

At it’s annual outlook conference the USDA released its preliminary
production and demand estimates on Friday. USDA estimated 2007/2008 ending
stocks for soybeans at 370 mil. bu down from its 2006/07 forecast of 595
mil. bu. China purchased more South American soybeans over the weekend.
Brazil grain analyst Celeres estimated soybean harvest is 18% complete about
3% to 5% ahead of normal. Chinese Soybeans, Meal and Oil all closed lower
overnight. Malaysian Palm Oil futures closed lower. Technical traders look
for May soybeans to support around the 7.40 area.

eCBOT Overnight:

Contract            Last      Change High      Low

ZSH7                730^2    -8^6      735^2    730^0

ZSK7                744^4    -9^0      752^2    743^4

ZSN7                759^2    -9^4      767^0    758^4

ZSQ7                765^0    -8^4      765^0    765^0

ZMH7                212.0    -3.6       214.9    212.0

ZMK7                217.2    -3.7       220.5    216.8

ZMN7                222.3    -3.6       225.2    222.3

ZLH7                 29.38    -0.31     29.55    29.38

ZLK7                 29.86    -0.22     30.05    29.82

ZLN7                 30.35    -0.21     30.45    30.34

Early Opening Calls: 8 to 9 cents lower.

Soybean Complex:  Meal $3-$4 lower, Oil 20-30 cents lower.

Top News:

-- Allendale released 2007 planting estimates Friday: Soybeans 65.9 mil.
acres vs. 75.5 last year.

-- China's Premier indicates string of excellent grain harvests could end
due to unusually warm winter, dry conditions

-- Commodity Marketing specialists predict grain storage squeeze on
increased corn plantings and higher yield vs soybeans - est. current storage
capacity of 11 bln bu.

-- Traders in the far east expect buying of US corn, soybeans and wheat to
slow amid unstable prices, high freight rates and reduced meat production.

-- Some concern that high freight rates could hamper demand of US grain.

-- The Commitment of Traders report with Options as of February 27 shows
Funds:  Corn  Long  346,048  off 720   Soybeans Long  96,233  up 2,881
Wheat  Long  24,241  up  12,458    Meal  Long  48,466  off 14,927   Oil
Long  69,700  up  814

-- The Supplemental report shows Index Funds:  Corn Long  361,720  up  8,651
Soybeans  Long  135,639  off  1,153    Wheat  Long  194,427  up 2,089

-- Funds continued to liquidate long Friday but not as aggressive as
Thursday.  Friday Funds sold 6,000 Soybeans, 4,000 Corn, 1,000 Wheat, 3,000
Meal. Bought 4,000 Oil.

-- Friday saw more liquidation with Corn open interest off  5,900, Soybeans
off  5,832, Wheat off  2,852.

-- Deliveries:  Corn  129 thru 2/22/07 no stopper    Soybeans 909 thru
3/2/07 no stopper  Wheat  2,433  thru 3/2/07       Meal  598 thru 3/1/07
ADM  stopped 63  Oil  2,321 thru  3/2/07 ADM stooped 174, Term 186

-- The Dow is set to open lower as futures are trading 100 points lower.
World markets under pressure with the Nikkei was off 3.3%, Hong Kong off 4%,
Shanghai off 1.6%.

-- Other Outside Markets:  Gold trading lower this morning, Crude Oil
trading lower, the Dollar is trading lower vs. the Yen, higher vs. the Euro,
Chinese Soybean, Meal and Oil futures closed lower, Corn higher.

-- Malaysian palm oil futures closed 1% lower overnight to $547/ton on
soybean and crude oil weakness.

-- Soybean spreads: Tenco 400 SH/SK, 200 SX/SN, FCS 200 SX/SN

Exports: Taiwan tendering for 29,000 mt. US Corn and 16,000 Soybeans for
Apr.

Cash Markets:

CIF Soybeans:  Mar. +12 to +17, Apr. +15 to +20, May. +16 to +22, June +16
to +20. July +16 to +20, Aug. +24 to +28.

River house bids steady weak  STL  off  2 at –20, Morris IL. River  unch at
–35, Havan –36.

Processors: Decatur  -32K   Danville –28   Bloomington –30  Gibson City –30K

Board Crush Margins:   Mar.  61.91 off  .23       May  63.36 off  1.07



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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