Linn Group Morning Soybean Comment

CHICAGO - Aug 17/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybeans plummeted on Thursday with the front six contracts falling limit
down (50 cents) before recovering slightly. November ended Thursdays session
down 40 cents for the lowest close in November soybeans since May 15th.
2007. Traders say improved crop weather in parts of the Midwest have
pressured long liquidation for the most part as well as a global sell-off of
commodities due to the deteriorating credit problems. Volume on Thursday was
extremely heavy with an estimated 196,680 soybeans traded, 93,996 soybean
oil and 78,597 meal. Funds sold an estimated 15,000 soybeans, 10,000 oil and
5,000 meal.

Today a surprise .50 basis pt. cut in the discount rate by the fed has
markets reversing sharply and could influence the ag. Markets. Index fund
redemptions could continue today as investors and funds try to reduce risk.
Traders say the collapse in the bean market has November beans closing into
support near $8.00 and expect a bounce but caution against a break to the
7.80 level. Sharp declines in the Brazilian real added pressure and are
favoring increased South American soybeans. Overnight Chinese soybeans meal
and oil all traded lower. Malaysian palm oil futures down sharply.

Early Opening Calls: Beans steady to 2 cents lower, oil .15 to 25 higher,
meal .50 higher

Top News

**Fed cuts Primary Discount Rate 50 bps to 5.75%, says growth downside risks
have increased "appreciably"

-- Cattle On Feed: market analysts expect Aug 1 On Feed at 96%, July
placements at 87%, & marketings at 102%

-- USDA Soybeans 06/07 Export Sales Net: 236,000 mt; 07/08 Export Sales Net:
77,300 mt; expected 200,000-300,000

-- USDA Soybean Meal 06/07 Export Sales Net: 95,500 mt; expected 50-100,000

-- USDA Soybean Oil 06/07 Export Sales Net: 15,200 mt; expected 10-30,000

-- Dalian Soybean futures acitve May contract 48 yuan lower. Soymeal futures
64 yuan lower in Jan., while soyoil futures off sharply 264 yuan lower in
Jan. following eCBOT & Malaysian oil futures.

-- Malaysian Palm oil futures off 11 ringgit in overnight trade.  Traders
wonder whether credit crisis will eventually spill over to lower global
growth dampening interest in palm oil futures.

-- eCBOT Vol. 129,885; Pit Vol. 55,765; Open Interest Change: -5,771

-- Outside markets. Energy complex: crude +85c, product higher; Gold $3.2
higher & Silver up 17c; US $  higher vs Euro, but lower against Yen as
reversal of Yen carry trade continues.

Cash Markets

            Bean Barge       Corn Barge        SRW Barge       HRW Track
Ill Riv Frt

Aug      +25/30 X          +58/60 U             +0/+10 U         +50/ U
550

Sep      +28/32 X          +60/63 U             +10/20  U        +65/ U
610

Oc/No   +35/36 X          +54/58 Z             +30/  Z            +63/ Z
610

Truck                Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago                       -60 X     +2 U    -60 U

Toledo              -62 X     +10 U  -15 U

Dec ILL            -40 U    -3 U                  -9 U                -275 U



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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