Linn Group Morning Soybean Comment

CHICAGO - Jun 13/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

July Soybeans closed down 3 ¼ cents on Tuesday as traders were once again
given a new weather forecast to focus on. The previous weather model that
had a blocking ridge for most of the corn belt was revised in the 6 to 10
day forecast to bring in below normal temperatures and above normal
precipitation. This took some of the weather premium out of the market
traders say. The market traded almost 7 cents lower in early trade and
quickly rebounded only to give back the gains and spend most of the day on
the defensive. Also contributing to the weaker trade was the release of the
weekly condition ratings showing soybean conditions declining by 1
percentage point while traders were expecting a decline of 1 to 3 percentage
points. Volume was heavy with an estimated 151,998 soybean futures, 38,112
meal futures and 57,521 oil futures traded. Funds sold an estimated 3,000
soybeans, 500 meal and were about even in oil.

Today’s early opening calls for soybeans are lower as the market focuses on
a steep decline in world vegoil prices. Declines in palm oil overnight and
related plunge in soybean oil are expected to lend pressure on soybean
futures. Outlooks for showers in the U.S. Midwest by the weekend through
early next week also weighing on the market along with falling outside
markets like gold and crude oil. Traders indicate technical support for July
Soybeans at $805 to $810 area and in November $845 to $8.50. The Bursa
Malaysia Derivatives Exchange on Wednesday raised margins on Palm oil
prompting concern among traders that hedging will be more expensive. As a
result Malaysian palm oil futures plunged nearly 3-1/2 percent because of
the exchange regulator's sharp increase in margin. Overnight the GFS weather
maps are going wetter and cooler for next week however the European model
tries to bring in a ridge into the eastern Midwest later next week.  Also
overnight Chinese Soybeans and Meal futures closed lower.

Early opening calls: Soybeans 8 to 10 cents lower, Meal $1.00 to $2.00 lower
and Oil .50 to .70 lower.

Top News

-- Brazilian authorities likely to ban winter seeding of soybeans in several
states to contain the spread of Asian soybean rust, acc. to Celeres

-- Higher Corn prices & lower petrol prices in 2nd half of 2007 concern
Raymond James' stock analyst into downgrading 4 ethanol based stocks from
outperform to strong buy, acc. to marketwatch website article

-- German biodiesel industry still only operating at half strength;
contractors reportedly refusing to sign long-term deals with manufacturers
as lack of profitability begins to take its toll, acc. to a German biodiesel
trade group

-- Dalian Soybean futures sharply lower on apparent lack of feed demand &
higher import quantities; soymeal lower & soyoil sharply lower

-- Malaysian palm oil futures decline -3.4% overnight to $677/ton after
dropping -8% of its value at one point in the day;  new margin requirements
designed to reduce speculative trading scare some players out of the market

-- The Malaysia Derivatives Exchange said today that open interest in palm
oil

futures rose to 101,525 contracts on June 11.

-- Funds Sold 3,000 Soybeans, 500 Meal. Fund ended even in Corn and Oil.

-- eCBOT Vol. 92,786; Pit Vol. 61,431; Open Interest Change: +1,921

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

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

Cash Markets

--CIF Soybeans: June -4 to +2, July -4 to +2, Aug. Option to +8,  Oct. Opt.
to +10, Nov. +10 to +20, Jan. +22 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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