Linn Group Morning Soybean Comment

CHICAGO - Apr 2/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybeans closed down 17 cents on Friday after the release of the USDA spring
planting intentions report. At one point May soybeans were 30 cents lower
and later made an attempt to trade higher on the day but could not with corn
trading limit down all day. With the widely anticipated planting intentions
report behind us traders say they expect the market to stabilize. Overnight
corn was limit down again in the front months and has cast a bearish tone
for today's grain trade. Traders say they expected soybean futures to trade
higher on Friday because the USDA forecast a drop in US soybean plantings,
but the corn collapse proved too strong for the soybean market to withstand.
Funds were active sellers on Friday selling 6,000 soybeans, 3,000 Oil and
5,000 Meal.

With the big spring report behind us traders say the focus now turns to
actually getting the crop planted and whether or not the numbers actually
come true. With corn prices down so much some traders say farmers may plant
more soybeans than the report shows. Also if weather turns bad the farmer
may not be able to get all his corn planted. Overnight Corn is limit down
again which will weigh on the soybean complex. Early opening calls for
soybeans are 5 to 7 cents lower. Overnight Chinese soybean, meal and oil
closed lower. Malaysian Palm oil futures closed mixed.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSK7                756^0    -5^2                  760^4    751^2

ZSN7                772^0    -6^0                  776^6    767^2

ZSQ7                783^0

ZSU7                790^4

ZSX7                 799^4    -5^4                  803^4    795^0

ZMK7                210.2    -1.6                   211.7    208.1

ZMN7                216.0    -1.4                   217.1    213.5

ZMQ7               216.9    -3.5                   218.0    216.9

ZLK7                 32.25    -0.23                 32.48    32.21

ZLN7                 32.77    -0.15                 32.99    32.72

ZLQ7                33.18

Early Opening Calls: 5 to 7c lower; Soymeal $1 to $2 lower; Soyoil 15 - 20c
lower

Top News

-- WHO head calls the current spread of H5N1 bird flu into Europe/Africa
"unprecedented", calls for vigilance against a new pandemic

-- Bangladesh sees spread of avian flu to 5 additional farms despite
previous culling efforts

-- SGS estimated March palm oil exports from Malaysia at 998,759 tons, a
rise of 16.3%

-- Russian Ag. Ministry proposed  price levels to buy grains this yr. in an
effort to support domestic producers - analysts SovEcon feel prices are too
low.

-- South Korea and the United States reach landmark trade compact -  SKorea
compromised on the beef issue (gradual reduction of 40% tariff), US gave
ground on South Korean products made in North Korea;  issue of rice largely
unresolved - $20 bil extra trade flow expected between the two nations
because of deal

-- Upcoming Easter holiday will postpone EU's Thursday grain mgmt committee
meeting this week

-- Chicago Board of Trade announces record business: volume breaking
quarterly/monthly records

-- Ecuador announced force majeure on oil exports because of Amazon protests
and low stocks in the refinery system.

-- Gov't weather study in Southwest Australia concludes hotter and drier
conditions ahead due to climate change.

-- Dalian Soybean Markets: lower 12 Yuan/T basis Sept contract.  Soymeal &
Soyoil futures also lower.

-- Malaysian palm oil futures declined modestly overnight to $597/ton with
substitute products taking a minor hit and crude fears easing

-- Sunflower oil exports from Ukraine through the Black Sea fell over 62k mt
or 38% to 101.8k mt in March vs, 165k mt in Feb.

-- The Commitment of Traders report with Options as of  March 27 shows
Funds: Soybeans Long 83,146 up 2,317

-- eCBOT Vol: 122,187; Pit Vol.: 61,888; Open Interest change: +369

-- Weather: Below Normal Temps. Below Normal Precip. 6-10 day outlook

-- Outside markets:  Energy lower, US $ lower vs Yen & Euro, Gold & Silver
easier

Cash Markets

-- CIF Soybeans:  Apr. +8 to +11, May. +13 to +18, June +4 to +12. July +9
to +20, Aug. +10 to +15. Oct. +16 to +26

-- Processors: Decatur  -25   Danville -30   Bloomington -30  Gibson City
-25



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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