Linn Group Morning Soybean Comment

CHICAGO - Aug 6/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

November soybeans rallied on Friday to close 6 ½ cents higher. Volume on
Friday was light with an estimated 77,760 soybeans traded, 39,760 oil and
38,238 meal traded. Traders say several factors contributed to the higher
trade, reduced acreage in beans, infestation of aphids and rust problems in
southern growing areas, major reductions in western European rapeseed crop,
problems in the Canadian rapseed crop and big demand worldwide for oilseed
products. Through Friday key growing areas have been experiencing extremely
hot conditions and little if any precipitation. Fund trade was moderate on
Friday with funds buying an estimated 3,500 soybeans, 1,500 meal and even in
oil.

Today’s calls are for a sharply lower open. The lower calls based on
widespread heavy rains that came across the Midwest giving soybeans a much
needed drink at a key development stage. The rains stretched from So. Dakota
and Nebraska across the upper Midwest to Ohio. Areas of greatest
precipitation were southern Min, and Wisc along with So. Dakota, Iowa and
No. Il. Rains are also forecast this week along the same line throughout the
week. Traders however caution that reduced acreage in beans will cause the
market to be nervous. Malaysian plam oil futures plunged 4% overnight on
Monday to touch a 2 week low. Traders say lower crude oil and lower soybean
oil prices are dragging palm oil lower. Asia’s veg oil demand has been
dampened by surging prices. Today after the close the USDA will release
their weekly crop condition report and expectations for further
deterioration are expected. Overnight Chinese Soybean futures closed higher,
meal lower and oil sharply lower.

Early Opening Calls: 12-13c lower; soymeal $3-4 lower; soyoil 55-60c lower

Top News

-- Brazilian or Argentine soyoil sought in purchase tender by Iran.  Traders
say volume is for 35,000 mt for Sept delivery.

-- Dalian Soybean futures nearby Jan +1 yuan, May 41 higher; nearby Sep
soymeal 14 yuan lower, but active Jan & May meal higher; soyoil sharply
lower down 52 yuan in active Jan 08.

-- Palm oil base export prices raised by Indonesia, various products saw
raises between 1.8-7.0%.  Base export prices are how the gov't calculates
taxes due by exporters.

-- Malaysian Palm Oct futures 4% lower overnight as crude oil & eCBOT soyoil
fall.  Traders continue to weigh increasing production against future export
demand.

-- eCBOT Vol. 49,571; Pit Vol. 25,492; Open Interest Change: -52

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

-- Outside markets. Energy: crude $1.10 lower, products lower ; Gold $1
lower & Silver: 3c lower; US $ lower vs Euro & Yen

Cash Markets

--CIF Soybeans weaker off 2. Aug. -2 to +2, Sept. +5 to +10, Oct. +20 to
+22, Nov. +25 to +34, Dec. +20 to +30,  Jan. +27 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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