Linn Group Morning Soybean Comment

CHICAGO - May 9/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

July soybeans ended Tuesday’s session 3 cents lower after an initially
weaker open. July beans opened 5 ½ cents lower and put in their lows in the
first 5 minutes of trade before the recovery began. At one point in the day
July soybeans were 4 ½ cents higher but ultimately led lower by corn.
Traders say good planting weather and the idea that corn is getting planted
reduces the likelihood that there will be any significant switch from to
corn to beans has helped hold this market together. Volume was light with an
estimated 82,396 soybean futures traded, 23,229 oil futures traded and
26,216 meal traded. Funds were net sellers of an estimated 2,000 soybeans,
1,000 meal and even in oil.

Improving weather allowing farmers to finish the bulk of their corn planting
is supportive for soybeans as traders focus on completion of corn planting
and progress of the soybean planting. Heavy rains have slowed seedings in
Nebraska, South Dakota and western Iowa, but generally good crop weather was
reported in most of the growing areas. The USDA will release  their monthly
grain S&D report on Friday. Analyst expectations are for ending stocks of
soybeans to be 607 vs. 615. Drier weather in Argentina has been a boost to
soy harvest while some wet weather in southern Brazil slowing harvest.
Statistics Canada pegs Canada's 2007 soy stocks at 1.916 million mt., up
15.0 percent from last year's 1.666 million. Canola stocks for 2007 at 4.277
million, down 16.4 percent from last year's 5.116 million. Overnight Chinese
soybean futures closed higher, meal closed higher and Malaysian palm oil
futures closed higher.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSN7                743^0    3^4                   744^0    739^0

ZSQ7                751^0    4^2                   751^0    747^0

ZSU7                757^0    2^2                   758^2    757^0

ZSX7                 771^0    2^2                   773^0    768^2

ZMK7                194.5

ZMN7                200.1    0.3                    200.9    199.7

ZMQ7               202.5    -0.3                   203.6    202.5

ZLK7                 32.62

ZLN7                 33.25    0.21                  33.33    33.04

ZLQ7                33.28    0.00                  33.28    33.28

Early Opening Calls: 2 to 4c higher; Meal 50 to 75c higher; 25-50c higher

Top News

**Stats Canada Canola March 31 Grain stocks: 4.28 mmt; expected 4.5 mmt

-- Conab LOWERS 06/07 Brazil soybean harvest to 57.5 mln mt, vs 57.9 mln mt
in prior forecast the group made in March

-- UN agrees biofuels will reduce global warming and help rural areas, but
may negatively affect urban poor and the environment as a whole

-- EIA sees summer national retail gasoline prices average peaking at
$3.01/gal in May, then again in August

-- EIA says growing global demand, lack of refining supply, will cause nat'l
retail gasoline prices to average $2.95/gal over the summer driving months,
that's up from $2.84/gal prior estimate

-- Chinese construct a power plant that uses corn stalk biomass as its
primary feedstock; estimates cite the plant will use 300k tons of the waste
each year and will generate 300 mil KW of electricity, acc. to a
construction company statement

-- Pacific freight rates down so far on the week, but an expected
post-holiday buying spree from China/India could end up lifting rates, acc.
to ship brokers-- Dalian Soybean, Soyoil, & Soymeal futures were all higher
in overnight trade.

-- Malaysian Palm

-- Funds sold 2,000 Soybeans, 1,000 Meal. Even Oil.

-- eCBOT Vol. 46,864; Pit Vol. 33,496; Open Interest Change: -1,321

-- CBOT May Soybean Deliveries: 1144

-- CBOT May Soyoil Deliveries: 130

-- CBOT May Soymeal Deliveries: 411

-- Private forecaster predicts Atlantic Basin will experience 13-14
hurricanes; also expect 6 or 7 tropical storms will strike US coastline this
season, Gulf Coast at most risk, Accuweather.com predicts.

-- Colorado meteorologists predict an "above average" probability of a
significant hurricane landfall on US Gulf Coast

-- Outside markets. Energy higher; US $ higher vs Euro & lower vs Yen; Gold
& Silver lower

Cash Markets

-- CIF Soybeans:  May. -3 to Option, LH May Option to +5, June +3 to +10,
July +12 to +16, Aug. +10 to +18,. Oct. +23 to +27

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



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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