Linn Group Morning Soybean Comment

CHICAGO - Jun 12/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

After the release of a relatively benign USDA crop supply and demand report
July soybeans closed 8 ½ cents higher to close at $830.0. Traders say it was
not the report that drove beans higher but the revised 6 to 10 day forecast
that put dry weather and above average temperatures into the eastern corn
belt. Farmers in that region are becoming more concerned because it has been
drying out for a number of weeks now and some stress is beginning to show.
While Mondays session was strong we never reached the gains from the night
session which took July Soybeans up to 848 3/4. The Market did not open as
strong as expected and the trading range for the day was established in the
first 45 minutes of trade. Volume was heavy with an estimated 166,016
soybean futures, 60,669 oil and 48,381 meal traded. Funds bought an
estimated 9,000 soybeans, 3,000 meal and 2,000 Oil.

After the close the USDA released the weekly crop progress report showing
soybeans rated at 70% good to excellent vs. 71% last week, 67% last year and
a 65% average. This is in line with analysts expectations for a 1% to 3%
drop in conditions and some analysts are predicting ratings to fall again
next week. Talk that China has cancelled palm oil contracts and US analysts
and traders could not confirm the rumors but noted a sharp decline in palm
exports that weighed on the Malaysian market and on soybean oil as well.
However Malaysian palm oil rallied significantly overnight to close up
almost 5%. Oil world reported that the global 2007/08 soybean crop is likely
to fall by about 6.5 mil. mt. on the season to 228.50 mil mt. They attribute
the reason to an estimated drop in US soybean harvest to 77.60 mil. mt. from
86.77 mil. mt. Early calls are lower. Overnight Chinese soybeans closed
lower and meal mixed. Malaysian palm oil futures closed significantly higher
up 5%.

eCBOT Overnight

Contract            Last      Net Change       High      Low

ZSN7                827^2    -2^6                  829^4    823^6

ZSQ7                833^4    -4^4                  836^2    832^0

ZSU7                841^2    -3^6                  845^0    840^4

ZSX7                 860^0    -3^4                  861^6    856^2

ZMN7                229.4    -0.8                   230.0    228.2

ZMQ7               229.4    -1.3                   230.0    229.2

ZMU7                231.0    -1.3                   231.2    230.9

ZLN7                 35.49    0.07                  35.66    35.17

ZLQ7                35.77    0.08                  35.78    35.45

ZLU7                 36.01    0.06                  36.01    35.83

Early Opening Calls: 2 to 3c lower soybeans, .50 to $1.00 lower meal and .05
to .10 lower oil.

Top News

Soybean Progress & Conditions Mini-Recap

Soybeans % Emerged:  84%; 70% week ago; 82% yr ago week; 75% 5 yr avg.

Soybean Crop Conditions Latest: VP= 1; P= 5; F= 24; G= 58; EX= 12

Soybean Crop Conditions Prior Wk: VP= 1; P= 4; F= 24; G= 59; EX= 12

Soybean Crop Conditions Yr Ago Wk: VP= 1; P= 5; F= 27; G= 55; EX= 12

-- S Amer soybean crop not enough to offset lower US production and 07/08
global soy crop expected at 228.5 mln mt, a decline of 6.5 mln mt according
to forecast by industry trade analyst, Oil World

-- Monday's USDA 06/07 Soybean Inspections:  10.874 mil bu, expected =
10.0-15.0, previous = 5.426 mln bu.

-- Indian soybean meal exports in May down -50% from a year ago to 121k
tons;  marketing year exports -6.9% lower to 3.11 mil tons

-- Argentina's 06/07 soybean harvest 98.3% complete, +3.1% from previous
week, acc. to gov estimates

-- Argentina's 06/07 soybean production bumped up about 1% from previous
estimates to 47.1 mil tons on bumper yields, acc. to Argentine gov estimates

-- Customs numbers show China's soybean imports up 9.2% over last year at
11.34 million tons. for the 1st five months of the year.

-- 2007 Polish rapeseed production may meet or exceed 2 mil tons, a record
for the country, acc. to private analysts

-- Total 2007 Polish grain production pegged at 27.6 mil tons total, +27.2%
increase from previous estimates, acc. to private analyst Grain Chamber

-- European Union announces intentions to simplify and standardize farm
subsidies across the entity - current subsidies worth approximately $58.74
billion, acc. to gov. statements

-- Dalian Soybean futures closed lower; soymeal mixed & soyoil lower again.

-- Malaysian Palm reverse couple days of declines and finish nearly 5%
higher on future production concerns.

-- Funds came after all the markets Monday buying  9,000 Soybeans, 3,000
Meal, 2,000 Oil.

-- eCBOT Vol. 102,691; Pit Vol. 66,999; Open Interest Change: +2,401

-- Weather: Normal to Below Temps West, Above East. Normal to Above Precip.

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

Cash Markets

-- CIF Soybeans:   June -4 to +4, July -5 to +3, Aug. Option to +10,  Oct.
+7 to +12, Nov. +17 to +24, Jan. +20 to +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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