Linn Group Morning Soybean Comment

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

Soybeans ended weaker on Wednesday down 4 ½ cents after opening better than
expected led by a strong wheat market. Traders say wheat was limit up and
beans were strong on the heels of wheat. As the deliverable September wheat
traded off, it led all grains lower beans began to break quickly. Meal also
corrected just ahead of the July highs after all attempts at rallies were
quickly met with fund selling. Volume was heavy again with 136,667 soybeans
traded, 58,630 oil traded and 75,050 meal traded. Funds were net sellers of
3,000 beans, 1,000 meal and bought 3,000 oil.

Early calls today will be weaker based upon overnight trade that has
November soybeans down 8 cents. Traders say that the market is due a break
after rallying $112 ½ cents since the August 16th. lows of 804 ¼ to
yesterdays highs of 916 ½ in the November contract. Traders say the
correction is to be expected with beans trading over $9.00 but caution not
to get too bearish that fundamentals are still good. Technical traders
indicate they expect support to be in the $8.90 to the $8.95 area for
November beans. A series of Corn and bean production estimates will be
released in the next few days ahead of Wednesday’s crop report. Yesterday FC
Stone released their bean production estimates at 2.682 bil bu. and a yield
of 42.4 bpa vs their August estimate of 2.681 bil bu and a same bpa of 42.4.
Informa is expected to release today @ 10:30 CST. Linn Group estimates will
be released tomorrow. Talk that with wheat supplies getting tight that
farmers will plant more wheat and less oilseeds for 2008 is being viewed as
supportive to the bean complex. Overnight Malaysian Palm oil futures traded
lower

Top News

-- USDA weekly Thursday Export Sales report to be released 7:30 AM CT,
Friday, September 6, 2007, due to the Labor Day Holiday.

-- Production estimates of Corn & Soybeans to be released by Informa around
10:30 AM CDT

-- Export Sales: Philippines bought 40,000 MT U.S. soymeal in overnight
trade

-- Analyst sees continued price increases to Black Sea sunflower oil prices
as the EU continues its policy of higher biodiesel production.  Prices have
risen nearly 25% to $1,010/ mt from the early June to current Sept period

-- Weather could raise Australia's soymeal imports during 2008 & Argentina
could be a supplier of meal along with traditional partners of US & Brazil,
acc. to traders in reuters interview.

-- Canadian canola crushing plant will go ahead with construction &
production despite 50-60% higher labor & raw material inputs, acc. to JR
Int'l CEO.

-- German Ag ministry says 2007 harvest has declined by 6% to 40.9 mln mt
due to adverse weather conditions.

-- Official from Spanish Ag ministry sees 2007 grain harvest at 23.7 mln mt
up 3.4 mln from 2006 harvest. Official also says int'l grain prices will
have limited impact on consumer food.

-- USDA official accuses China of "digging" for "defective" US goods instead
of engaging in constructive talks about food & export safety issues & China
has not changed its import policies of beef, pork & poultry.

-- Cindy Smith named as head of USDA Animal & Plant Health Inspection
Service, replacing retiring Ron DeHaven.  Ms Smith had been head of
biotechnology dept of APHIS.

-- Crop report from Saskatchewan released Wednesday shows 44% of crops were
harvested as of Sunday, up 17% from prior week & ahead of the 5 yr average
of 31%.

-- Dalian Soybean futures closed lower in overnight trade, Jan off 20 yuan,
May only off 6 yuan.  Soymeal mixed, Jan off 14 yuan, but May +2 yuan/mt.
Soyoil futures closed lower.

-- CBOT Deliveries: Soybeans  1,551

-- CBOT Deliveries: Meal             384

-- CBOT Deliveries: Oil       1,022

-- eCBOT Vol. 96,602; Pit Vol. 34,739; Open Interest Change: +2,955

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

-- Outside markets: Energy complex: crude 45c higher, products higher ; Gold
$7.20 higher & Silver 15c higher; US $ lower vs Euro, higher vs Yen

Cash Markets

--CIF Soybeans  up 1 to 4.  Sept. +10. to +18, LH Sept. +20 to +25, Oct. +25
to +32, Nov. +40 to +52, Dec. +32 to +42, Jan. +40 to +50, Feb. +30, Mar.
+25 to +43



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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