Linn Group Morning Soybean Comment

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

July Soybeans ended down 10 ½ cents on Friday on a large volume day. After
opening 12 cents lower sell stops were triggered taking the soybeans 24
cents lower to 808 (July) before beans began mounting their charge, rallying
20 cents off the lows and almost into positive territory before breaking
near the close. Overall support remains from $8.00 to 8.10 for July soybeans
but traders say the roll has begun and open interest will switch to November
where technicians say support is from $8.40 to $8.45 range. Much of Fridays
break is being attributed to a breakdown in prices in Malaysian palm oil
futures which sold off hard triggering a sell-off in the soybean complex.
Traders say some of the selling was pre-report positioning in front of the
release of today’s USDA Supply and demand report. Volume was heavy with an
estimated 179,947 soybean futures, 71,070 oil futures and 48,378 meal
futures traded. Funds sold an estimated 7,000 soybeans, 1,500 meal and 5,000
Oil.

Today the USDA released their Supply and demand report and the USDA pegged
2006/07 U.S. soy ending stocks 610 million bushels, above an average of
analysts' estimates for 600 million and 2007/08 ending stocks 320 million,
above estimates for 317 million. Traders say more important are concerns
about some outlooks for hot and dry weather in the U.S. growing regions.
Traders said the weather worry would override the mildly bearish U.S. corn
ending stocks numbers released by USDA early on Monday. Some of this weather
worry showed up overnight with July soybeans surging 27 ¼ cents at one point
to end the night session up 7 ¾ cents. Friday’s commitment of traders report
with options shows funds long 135,165 soybeans up 18617, meal long 35,274 up
9,918 and oil long 82,647 up 4,486. Supplemental report showing index fund
positions has soybeans long 143,635 up 1,984. Overnight Chinese soybeans,
meal and oil futures closed lower. Malaysian Palm oil finished sharply
lower.

 eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSN7                829^2    7^6                   848^6    829^0

ZSQ7                838^0    9^0                   856^4    837^6

ZSU7                846^4    9^2                   860^2    846^4

ZSX7                 861^0    6^4                   880^2    861^0

ZMN7                229.0    2.8                    231.9    228.5

ZMQ7               231.0    4.3                    232.0    229.0

ZMU7                232.0    4.6                    233.0    231.5

ZLN7                 35.29    -0.08                 36.74    35.29

ZLQ7                35.66    0.06                  36.92    35.60

ZLU7                 35.80    -0.05                 37.08    35.80

Early Opening Calls: 10 to 12c higher post report, drier outlook presses
market higher

==USDA June Supply/Demand==

**World 07/08 Soybeans Carryout: 54.00 mmt; 06/07 63.60mmt

**World 07/08 Soyoil Carryout: 2.41 mmt

**World 07/08 Soymeal Carryout: 5.43 mmt

**US June Soybean 07/08 Carryout: 0.32 bln bu; est. 0.33; May Rpt 0.320

**US June Soyoil 07/08 Carryout: 2.184 bln lbs.; May Rpt 2.179

**US June Soymeal 07/08 Carryout: 300,000 T; May Rpt 300,000 T

**June Brazil 07/08 Soybean Output:61.0  mmt

**June Argentina 07/08 Soybean Output: 47 mmt

Top News

-- USDA weekly crop progress released today at 3:00 pm CDT

-- Chinese state press agency reports the central gov't might shift corn
based ethanol plants feedstocks to alternative raw material like casava

-- Commitment of Traders report with options as of June 5 shows Funds:
Soybeans Long 135,165 up 18,617; Meal Long 35,274 up 9,918; Oil Long 82,647
up 4,486

-- China announced it's May trade surplus was $22.45 billion, up 73%

-- Dalian Soybean futures settle lower shrug off gains overnight in eCBOT
soy. Soymeal & soyoil futures were lower.

-- 339,117 mt of Malaysian palm oil exported during the first 10 days of
June according to ITS

-- Malaysian Palm oil futures hit by lower than expected June export
figures, finish 6% lower overnight

-- eCBOT Vol. 112,744; Pit Vol. 71,750; Open Interest Change: -7,844

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

-- Outside markets. Energy complex higher; Gold $5 higher & Silver higher;
US $ higher vs Yen & Euro.

Cash Markets

-- CIF Soybeans: June +2 to +5, July +3 to +7, Aug. +2 to +10, Oct. +10 to
+16, Nov. +20 to +26, Jan. +25 to +35



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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