Linn Group Morning Soybean Comment

CHICAGO - Sep 18/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean prices surged on Monday closing 13 ¾ cents higher for the 7th higher
consecutive close. Beans gapped higher on the open and never looked back
traders say boosted by fears of frost damage over the weekend to the upper
Midwest. The frost was about two to three weeks ahead of normal for the
northern crop belt traders say and caught the market by surprise. The
coldest spots were central Iowa and southwestern Minnesota. It is debatable
how much damage was done but even if there was not a lot of damage the
perception of damage is there. Soybean oil was higher as traders discuss the
potential for lower oil yields. Volume was heavy in the bean complex 126,038
soybeans traded, 43,983 oil and 1,983 meal traded. Funds were active buyers
buying an estimated. 3,000 beans, 2,500 oil and 2,000 meal.

Yesterday after the close the USDA released the weekly crop progress reports
Soybean conditions are unchanged at 56% good to excellent and 55% dropping
leaves and soybean harvest 4% complete vs 5% last year and 5% average.
Traders say areas in Dakotas, Min, Wisc and Iowa should expect the weekend
frost to reduce bean yields in that area to 25 to 30 mil bu. Over the
weekend a Chinese conference appears to show more cut in bean production in
some important provinces than what was announced last week. Analysts guess
that this could result in a crop reduction of 1.5 to 13 mmt and could
explain why their buyers were back in the US markets last week and again
over the weekend. Technical traders indicate more upside to come showing
support at $9.50 for November beans with upside targets of 10.80. Chinese
Soybean, Meal and Oil futures closed higher. Malaysian Palm oil futures
closed higher.

Early Opening Calls: Soybeans 4 to 6 higher, Meal $ 1.00 to $2.00 higher and
Oil .15 to .20 higher.

Top News

**Federal Reserve interest rate decision expected just after 1:15 pm CDT.

-- 140,000 mt of palm oil arrived during September in Pakistan, but head of
refiners assoc says Oct to Dec imports will back off slightly to around
100,000 mt per month over that time period

-- CME to launch options on Ethanol futures on eCBOT platform Oct 5, will
also offer clearing on cash-settled options and on ethanol calendar swaps.

-- Soybean Dropping Leaves: 55% latest; prior week 32%; 5 yr avg 47%

-- Soybean Harvest: 4% latest; prior week NA; 5 yr avg 5%

-- Soybean Conditions: Good to Excellent: 56% latest vs prior week of 56%.

-- Monday USDA Soybean Export Inspections: 10.949 ; expected 8 mln mt; prior
rpt 5.82 mln mt

-- To meet needs of local traders & import trends, Dalian Commodity exchange
will launch refined palm oil futures by the end of 4Q 2007

-- Malaysian palm oil exports Sept 1st to Sept 15th pegged at 602k tons,
+2.2% from the previous month, acc. to customs data - China the largest
customer

-- Dalian Soybean futures higher; Soymeal higher 56 yuan higher in very
active May trade; soyoil higher.

-- Malaysian Palm futures 15 ringgit higher to 2,605 ringgit/mt on strength
of soyoil & crude oil futures

-- eCBOT Vol. 95,445; Pit Vol. 25,881; Open Interest Change: +4,154

-- Weather: Above Normal Temps. Above Normal Precip. The Corn Belt will see
light scattered showers move west to east today into Thursday.

-- Outside markets. Energy complex mixed; Gold & Silver: higher; US $ lower
vs Euro, higher vs Yen.

Cash Markets

--CIF Soybeans  steady up  4. Sept. +24 to +28, LH Sept. +24 to +32, Oct.
+32 to +40, Nov. +42 to +50, Dec. +42 to +50, Jan. +47 to +52, Feb. +20 to
??, Mar. +33 to +38

Nate Smith

Linn Group

Toll Free (877)787-6278

Email:

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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