Linn Group Morning Soybean Comment

CHICAGO - May 11/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

July soybeans closed 1 ¼ cents lower on Thursday in spite of a 9 ½ cent
break in July corn. The trend lately has been for beans to follow corn and
yesterdays soybean strength was curtailed by the lower corn trade. Gains in
Oil were supported by a strong Malaysian palm oil market and surging crude
and gasoline prices. However the gains in soybeans were trimmed when corn
broke down and was trading 12 cents lower on the day. Volume was light with
an estimated 47,884 soybean futures, 23,562 Oil futures and 42,431 meal
traded as traders say reluctance to hold positions into today’s USDA crop
report caused some position squaring and lack of interest in holding
positions into the report. Funds slod an estimated 2,500 soybeans, 2,500
meal and 2,000 oil

Today’s USDA report shows a mostly bullish scenario for soybeans traders
say. The USDA said U.S. new-crop (2007/08) U.S. soy ending stocks would
total 320 million bushels, below an average of analysts' estimates for 336
million and sharply below old-crop ending stocks at 610 million. bean
carryout cut almost in half between 06/07 and 07/08 Traders say soybeans
should be supported by the USDA numbers as well as a higher opening call in
Corn and a higher crude oil market should prove supportive to soybean oil.
Dryer warmer weather is forecast for the corn belt further aiding farmer
planting. Overnight Chinese soybeans closed firm, Meal closed mixed and
Malaysian Palm oil futures closed higher.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSK7                735^4    2^4                   735^4    733^0

ZSN7                749^0    2^6                   749^2    745^2

ZSQ7                754^6    1^6                   754^6    753^6

ZSU7                760^0

ZSX7                 776^2    0^6                   778^0    774^0

ZMK7                193.7    -0.2                   193.7    193.7

ZMN7                199.0    0.1                    199.0    198.2

ZMQ7               201.8    0.2                    201.8    201.4

ZLK7                 33.53    0.23                  33.53    33.53

ZLN7                 33.98    0.26                  33.98    33.71

ZLQ7                33.96    0.02                  33.96    33.96

Post Report Opening Calls: steady/higher; soymeal steady 50c higher; soyoil
20 - 30c higher

Top News

**USDA May Supply/Demand Headlines**

**US May Soybean 07/08 Crop Prod: 2.745 bln bu.; 2006-07 Production 3.188

**US May Soybean 06/07 Carryout: .610 bln bu. ; est. 0.61; Apr Rpt 0.615

**US May Soybean 07/08 Carryout: .320 bln bu. ; est. 0.34

**US May Soyoil 06/07 Carryout: 2.954 bln lbs. ; Apr Rpt 2.794

**US May Soyoil 07/08 Carryout: 2.179 bln lbs.

**US May Soymeal 06/07 Carryout: 300k T ; Apr Rpt 300,000 T

**US May Soymeal 07/08 Carryout: 300k tons

**World 06/07 Soybeans Carryout: 61.89 mmt; Apr Rpt 61.0

**World 06/07 Soymeal Carryout: 5.06 mmt; Apr Rpt 5.02

**World 06/07 Soyoil Carryout: 2.77 mmt; Apr Rpt 2.76

**May Brazil 06/07 Soybean Output: 58.8 mmt; Apr Rpt 58.8

**May Argentina 06/07 Soybean Output: 45.5 mmt; Apr Rpt 45.5

-- Major news wire services average estimates for the USDA's May 06/07
Soybean ending stocks in a tight range from 606-607 mln bu. vs April's
supply/demand report 615 mln.  While the surveys for 07/08 ending stocks
also show tight estimated range of avg. analyst forecasts between 336-337
mln bu.

-- Argentina exported only 5k tons of soybeans in the month of Feb;  a 97%
drop from last year, acc. to gov data;  analysts believe more soybeans being
used by domestic crushers, spurred on by demand created by weak currency

-- IBGE:  Brazil '06/'07 Soybean Production pegged +0.5% higher than
previous estimates to 57.2 mil tons

-- High dry bulk freight rate costs have forced some Asian importers,
particularly Taiwan, to turn to container shipments to procure grain;  an
estimated 80% of soybeans have been shipped this way so far this year, acc.
to traders

-- ADM Statement:  14 billion gallons of ethanol do-able if gasoline blend
is bumped up to 10%;  company working to improve efficiency, explore
cellulosic ethanol

-- US lawmakers not expected to reduce ethanol import taxes anytime soon,
due to adequate supply in the US and fear of Brazilian competition, acc. to
BNP Paribas analyst

-- Dalian Soybean futures steady; soymeal lower; soyoil slightly higher

-- Malaysian Palm futures reacted positively to a fall in stocks and figures
showing a steady climb in exports.

-- CBOT May Soybean Deliveries: 514

-- CBOT May Soyoil Deliveries: 47

-- CBOT May Soymeal Deliveries: 207



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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