Linn Group Morning Soybean Comment

CHICAGO - Jul 25/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Tuesday’ session brought a mild recovery to the soybean market after Mondays
32+ cent decline. November soybeans closed 4 ½ cents higher. Traders say
some of the early support stemmed from the USDA cutting its rating of the US
soybean crop in the past week when traders were looking for improvement.
Also helping lift soybeans and soybean related products was the unrelenting
strength in wheat which hit an 11 year high yesterday based upon front month
weekly charts. Volume was moderate in soybeans and heavy in the products
with an estimated 103,136 soybean futures traded, 66,104 meal and 54,539 oil
futures traded. Funds returned to the buy side buying an estimated 2,500
soybean futures, 2,500 meal and 1,000 oil.

Today’s opening calls are expected to be 2 to 4 cents higher in beans, .50
to $1.00 higher in meal and .05 to .10 higher in oil. Traders say they
expect slightly higher prices stemming from continued support from a surging
wheat market and the market recovering from oversold conditions from Mondays
trade. Technicians however caution against being overly bullish in the
soybean complex putting nearby resistance at $8.55 to $8.60 and support down
to the $827 to $825 area. Weather is expected to be mild with the 6-10 day
forecast calling for above normal temperatures and normal to below normal
precipitation in the majority of the corn belt. Overnight Chinese soybean,
meal and oil futures all closed higher. Malaysian palm oil futures closed
weaker overnight.

Top News:

-- 07/08 Brazil soybean acreage could expand to 22.8 mln mt, a rise of about
7%, acc. to Brazilian based AgRural.  They further say in an early forecast
that Brazil could harvest 63.3 mln mt in the upcoming 07/08 campaign, using
06/07 yield results & new planted acreage estimate.

-- Southwest Arkansas detects first soy rust fungus in Little River county
on commercial crop.  Extension specialist from Univ Arkansas says scouting
will increase.

-- 2008 world palm oil production forecast by Oil World at 41.7 mln mt, up
from 2007 estimated production of 37.9 mln mt.  The analyst group expects
higher forecast output to weigh on palm prices in the medium term, but
overall oil market stocks tightness would lend support.

-- Indonesia official says, gov't is mulling cut to export tax on palm oil
by-products in a move that would promote the growth of the by products
industry. They also would consider a move to raise export tariffs on crude
palm oil, but more evaluation is needed before action is taken, acc. to the
official

-- Saskatchewan rapeseed conditions down 6 percentage points to 72
considered good to excellent, local weekly crop report shows

-- Dalian Soybean futures were higher in overnight trade, +13 yuan in Jan
'08, and +10 yuan in May '08. Soymeal was mostly lower, while soyoil
remained in positive territory.

-- Malaysian Palm oil futures lower.  India's prev. announced tariff cuts
aren't deep as expected, but updated export figures helped buoy the market

-- Funds back to the buy side Tuesday buying 2,500 Soybeans, 2,500 Meal,
1,000  oil.

-- eCBOT Vol. 69,527; Pit Vol. 31,925; Open Interest Change: -1,015

-- Weather: Above Normal  Temps.  Normal to Below Precip. Thursday into
Saturday Corn Belt will see scattered showers

-- Outside markets. Energy: crude mixed, products higher ; Gold off $6 &
Silver off 15c ; US $ higher vs Euro & Yen



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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