Linn Group Morning Soybean Comment

CHICAGO - Sep 5/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean futures posted a strong rally on Tuesday on the back of a limit up
day in Wheat. Beans opened 12 cents higher and immediately rallied another
10 cents in early trade and continued to rally before selling off late in
the session to end 25 cents higher in the November contract. As wheat
continues to surge into new all time highs livestock producers continue to
shy away from high priced wheat as a feedstuff increasing demand for soybean
meal worldwide traders say. Also supportive is dryness in the southern
Midwest and delta as concerns of low yields in those regions continue.
Volume on Tuesday was heavy, soybeans traded 160,019 contracts, oil 59,336
and meal 74,514 contracts traded. Funds were more aggressive buyers Tuesday,
buying an estimated 6,500 beans, 3,000 meal and 2,500 Oil.

Early calls will be for a stronger open again today as the overnight trade
indicates. Wheat was once again limit up on a relatively heavy overnight
trade. Beans ended the evening session up 5 ¼ cents. Yesterday after the
close the USDA released their weekly crop conditions report showing soybeans
rated 56% good to excellent vs. 55% last week and 59% last year. Traders say
these numbers are becoming less and less significant as harvest is starting
and traders focus will turn more to more real yield reports and harvest
progress. Crop Cordonnier raised his soybean yield ½ bu. per acre to 41.0
bpa. Reports of freight rate increases are rampant with barge freight up
sharply and Ocean freight rates rising. China’s northeast region continues
to experience the worst ever drought and expects this situation to have a
big impact on soybean output in that area. Overnight Chinese soybeans traded
lower, Malaysian palm oil futures ended higher.

Opening calls: Soybeans 5 to 7 cents higher, Meal $1.00 to $2.00 higher. Oil
.20 to .30 higher.

Top News

-- USDA conditions report showed Soybeans 56% good to excellent vs. 55% last
week and 59% last year.

-- Dalian Soybean futures lower overnight; soymeal lower, Jan 1 yuan lower &
May futures very active volume 16 yuan lower; soyoil Jan futures 16 yuan
lower.

-- Malaysian Palm futures ended higher, Nov contract was 36 ringgit higher,
as eCBOT soyoil futures help support prices

-- CBOT Deliveries: Soybeans  1,546

-- CBOT Deliveries: Meal             301

-- CBOT Deliveries: Oil    724

-- eCBOT Vol. 108,082; Pit Vol. 42,510; Open Interest Change: +3,477

-- Weather: Normal to Below Temps. Normal to Above Precip. The Corn Belt is
forecast to see scattered showers and thunderstorms today into Sunday.

-- Outside markets: Energy complex: crude +10c,; Gold -$2.60 & Silver 17c
lower; US $ higher vs Euro, lower vs Yen

Cash Markets

--CIF Soybeans off 2 to 7. Sept. +Opt. to +15, LH Sept. +5 to +20, Oct. +25
to +33, Nov. +40 to +55, Dec. +35 to +46, Jan. +40 to +50, Feb. +30, Mar.
+25 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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