Linn Group Morning Soybean Comment

CHICAGO - Jul 26/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

A quiet lackluster trade on Wednesday ended with November soybeans 6 ¼ cents
lower. After trading in a narrow 10 cent range solid fund type selling broke
the market and could not recover. Soybeans are about to enter their critical
growing phase and traders say with weather really a non factor at this point
there is little if any bullish news as the crop is in good shape entering
this critical phase. Volume on Wednesday was light, the lowest volume for
the week with an estimated 89,304 soybean futures traded, 42,278 meal
futures and 34,679 oil futures traded. Funds sold an estimated 4,000
soybeans, 2,500 meal and 1,500 oil.

Overnight soybeans rallied 8 ¾ cents. Traders say  Strong soyoil and palm
oil overnight, low U.S. soy acreage and outlooks for shrinking soy stocks in
the U.S. combined with strong crush to boost prices. Today the Census crush
report released this morning shows 148.69 mil. bu in line with estimated of
148.6 mil bu. Meal stocks came in at 317,064 short tons vs. estimates of
326,000 and oil stocks of 3,389,164 vs. estimates of 3,319,000. Weekly
export sales were 288.4 on the lower end of analysts expectations of 200,000
to 500,000 mt. Early calls are higher based upon strong soybean oil and palm
oil overnight. Crude oil is trading $1.00 higher as well. Traders report
support for November beans at at $8.25 and resistance from $8.55 to 8.60.
Breaks should be limited with the acreage reduction however weather is not
really giving us much reason to rally. Overnight Chinese soybean futures
closed higher. Malaysian Palm oil futures closed higher

Early Opening Calls: beans 8 to 10c higher; soymeal $1 higher; soyoil higher
by 40-50c

Top News

**US Census June Soybean Crush 148.69 mln bu

**US Census June Soybean Soyoil Stocks 3.389 bln lbs

**US Census June Soybean Soymeal Stocks 317,064 T

**USDA Soybeans 06/07 Export Sales Net: 288.4 mt, expected = 200-500k, 07/08
= 28.4

**USDA Soybean Meal 06/07 Export Sales Net: 87.0 mmt, expected = 125k, 07/08
= 25.1

**USDA Soybean Oil 06/07 Export Sales Net:  33.7 mt, expected = 0-10k

-- USDA Ag Sec. Johanns told reporters Wednesday that he and the Presidents
entire team of senior advisors will recommend the Farm Bill in it’s present
form if passed be vetoed.

-- USDA Ag Sec. sees 5 yr time horizon before ethanol made from cellulose
material will impact the US energy markets, cites 3 yr lead until viable
cellulose technology & add'l 2 years lead time for facility engineering &
construction

-- Dalian Soybean futures higher in both active Jan & May contracts. Soymeal
& Soyoil futures were mostly higher also

-- Malaysian Palm futures higher by nearly 2.0% in overnight trade.  Some
suggest support came from higher petrol prices, weakening local currency

-- Moderate Fund trade Wednesday. Funds Sold 5,000 Soybeans, 1,500 Meal,
1,500 Oil.

-- eCBOT Vol. 61,712; Pit Vol. 26,044; Open Interest Change: -7,781

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

-- Outside markets. Energy: crude $1 higher, gasoline 4c higher ; Gold
trading either side of unch & Silver: mixed; US $ lower vs Euro & Yen.

Cash Markets

-- CIF Soybeans firmer up 1 – 4. July -4 to Opt, Aug. -5 to +5, Sept. -15 to
-20, Oct. Opt. to +15, Nov. +18 to +25, Dec. +15 to +25, Jan. +27 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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