Linn Group Morning Soybean Comment

CHICAGO - May 17/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

The rally continues in the Soybean complex with July soybeans finishing
Wednesdays session up 14 ½ cents. Volume was heavy with an estimated 159,339
soybean futures traded, 35,580 soybean oil futures traded and 49,078 soybean
meal futures traded. Funds were very aggressive in the bean complex buying
an estimated 12,000 soybean futures, 4,000 meal and 1,500 oil. Since last
Fridays USDA supply and demand report funds have bought close to 30,000
soybean futures contracts. Traders say several factors are adding to the
recent bullishness. A rising Brazilian Real is making Brazilian soybeans
more expensive compared with US soybeans and raising the likelihood that
Brazilian farmers will cut soy production due to the higher currency.
Favorable corn planting weather has also added to the bullishness due to
increased corn acres planted in lieu of soybean acres. Also concerns of a
possible shift to a La Nina weather pattern this summer adding to concerns
of a hotter drier summer which could hurt soybean development.

Weekly export sales figures released today show USDA Soybeans 06/07 Export
Sales Net: 222,900 mt; expected 150-350,000,  Soybean Meal 06/07 Export
Sales Net: 86,900 mt; expected 50-125,000 and Soybean Oil 06/07 Export Sales
Net: 3,500 mt; expected Unch-5,000. Traders say they are concerned of a
setback today due to a rally of 46 ½ cents since last Thursdays close and no
real correction since the release of last Fridays report. Technicians show
resistance at 7.95 to 8.00. 6 to 10 day forecast calls for Normal to above
normal temperatures and normal to above normal precipitation. Overnight
Chinese Soybean and meal futures closed lower. Malaysian Palm Oil futures
closed higher.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSN7                787^2    -5^4                  794^4    786^4

ZSQ7                797^0    -2^4                  801^2    795^0

ZSU7                802^0    -5^0                  807^4    802^0

ZSX7                 816^0    -5^2                  822^4    815^4

ZSF8                827^0    -2^4                  829^2    827^0

ZMN7                212.1    -1.1                   213.9    212.1

ZMQ7               214.9    -0.9                   215.4    214.9

ZMU7                217.0    -0.7                   217.5    217.0

ZLN7                 34.60    -0.13                 34.87    34.60

ZLQ7                34.84    -0.13                 35.00    34.84

ZLU7                 35.10    -0.11                 35.36    35.10

Early Opening Calls: 3 to 5c lower; soymeal $1 lower; Soyoil 10-20c lower

Top News

**USDA Soybeans 06/07 Export Sales Net: 222,900 mt; expected 150-350,000

**USDA Wheat 06/07 Export Sales Net:56,900  mt; expected 250-550,000

**USDA Soybean Meal 06/07 Export Sales Net: 86,900 mt; expected 50-125,000

**USDA Soybean Oil 06/07 Export Sales Net: 3,500 mt; expected Unch-5,000

-- Argentine government estimates soybean production for 06/07 slightly
lower (less than one percent) to 45.2 mil tons

-- Brazilian currency strength has been supportive of US soybeans, according
to analyst.  The Real closed at its highest level in over 6 years after S&P
raise the country's long term sovereign rating, to just below investment
grade.

-- Informa releases its planting estimates for soybeans & corn today at
10:30 AM CT.

-- EU total grain crop estimated at 279.6 mln mt, down 5.0 mln mt from
Strategie Grains April estimate.  Despite the reduction, the latest figure
is still 7% higher than 2006

-- Japanese press reports that country's Ag minister will NOT automatically
eliminate a cattle age limit on US beef imports to Japan based on OIE
decision

-- UN Food & Ag expects 2007 global coarse grain production at 1.051 bln T a
rise of 7.1% from prior period.

-- US delegation that includes US Treas Sec Paulson & Fed Chmn Bernanke will
meet next week in China for round 2 of economic discussion.  USDA Ag Sec
Johanns will also be part of the group.

-- Senate Ag Committee Chairman looks to move ethanol beyond corn production
by stepping up research of cellulosic ethanol and production of cellulosic
feedstocks - may come at the expense of domestic crop subsidies, acc to a
statement

-- Dalian Soybean futures active Sept contract settled lower.  Soymeal
futures active Sep contract was unchanged while rest of the complex was
mixed.  Soyoil contracts closed lower.

-- Malaysian Palm benchmark Aug contract slightly higher, but other contract
months lower in line with soyoil futures in China & over night eCBOT.

-- eCBOT Vol. 103,662; Pit Vol. 55,616; Open Interest Change: +12,588

-- Weather Normal to Above Temps. Normal to Above Precip.

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

Cash Markets

-- CIF Soybeans:  May -1 to +5 , LH May +1 to +6, June +4 to +6, July +13 to
+18, Aug. +9 to +18,. Oct. +24 to +27

-- Processors: Decatur  -25   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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