Linn Group Morning Soybean Comment

CHICAGO - Mar 12/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

May Soybeans posted a slight gain of ¾ cent on Friday on a light volume
session. Traders say the USDA S&D report released Friday had little to no
impact as the numbers were right in line with expectations. Fundamentally
Soybean inventories remain heavy in the US and around the world. Harvest
coming out of South America continue to impress and traders say that the
USDA could be underestimating the South American crop, despite a 1 mi.l bu.
hike in its Brazilian forecast. For the Week May soybeans closed 6 ¼ cents
higher. Funds on Friday bought 1,200 Soybeans, sold 500 meal and 500 oil.

Early calls this morning are slightly lower and a lower crude oil market
could continue to pressure veg oil prices today. Reports show that India
will be raising vegoil imports 6% a year for the next several years and
could be supportive long term. Cash trade by soybean buyers is expected to
be slow this week as April shipments have been covered. Cash traders say
buyers are hesitant to buy From Brazil as prices were less attractive than
those from the US. Brazilian soybeans are favored by Japanese oil crushers
for their higher than average protein content. The commitment of traders
report shows index funds long 134,962 down 1,179. Overnight Chinese soybeans
closed mixed, Meal and Oil lower. Malaysian Palm oil futures closed higher.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSH7                747^4    1^0                   747^4    747^4

ZSK7                758^6    -1^0                  762^4    758^0

ZSN7                775^0    -0^6                  778^0    773^6

ZSQ7                782^2    1^6                   782^2    782^2

ZSU7                788^0    0^4                   788^0    788^0

ZMK7                221.6    -0.2                   222.2    220.9

ZMN7                226.6    0.5                    227.0    225.0

ZLK7                 30.54    -0.05                 30.62    30.43

ZLN7                 31.10    0.01                  31.10    31.10

Early Opening Calls: steady to 1c lower; soymeal mixed; soyoil slightly
lower

Top News

--Pres. Bush urges the US to develop feedstocks for ethanol to reduce impact
on livestock producers- in interview to air Monday night.

-- "Announcement mistake" leads to wrong CRP number:  4.6 mil acres to leave
CRP between '07-'10 - originally quoted as 4.1 mil acres in a public USDA
statement

-- China customs reports the country imported 1.18 mln mt of Soybeans in
February - 5.4% above same time last yr.

-- At the Dalian exchange in China Soybeans closed mixed; Soymeal and Soyoil
lower

-- Decline in farm acreage, lack of water, to hurt Chinese agriculture in
the future, acc. to top economic planning agency

-- The Commitment of Traders report with Options as of March 6 shows Funds:

Soybeans          Long  65,403  off  30,830

Soymeal           Long  35,354  off  14,112

Soyoil  Long  54,330  off  15,370

-- Deliveries:  Soybeans  212  Term stopped 45; Soymeal  23  no stopper;
Soyoil  139  Term stopped 74,  ADM 28

-- Soybean spreads: ADM 400 SN/SX, RJ 200 SH/SK, UBS 200 SK/SN, ABN 200
SK/SN

Cash Markets

-- CIF Soybeans:  Mar. +9 to +11, Apr. +12 to +16, May. +16 to +20, June +6
to +20. July +12 to +20, Aug. +20 to +28. Oct. +27 to +34

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

-- Board Crush Margins:  Mar. 62.22 up .48; May  64.70 up .68



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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