Linn Group Morning Soybean Comment

CHICAGO - Oct 1/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

November Soybeans ended the week on the defensive closing down 17 ¾ after a
big rally week. For the week beans gained 12 ¼ cents despite the break on
Friday. November beans traded to a contract high of $10.17 ½  which was only
the 2nd time in history that the November soybean contract has traded above
$ 10.00. Traders indicate that it is to be expected for beans to struggle
with a $10.00 price and caution traders to be too bearish despite Fridays
break. The quarterly stocks report issued Friday shows soybeans stocks at
573 mil. bu compared to 449 last year, near analysts expectations. Volume on
Friday was very heavy, 134,872 beans traded, 59,127 bean oil traded and
60,239 meal traded. Funds were active Friday selling an estimated 5,000
soybeans, 3,000 oil and 3,000 meal.

Today’s early calls are for beans to open 3 to 5 higher. With wheat rallying
overnight and concerns with dry weather in Brazils northern Mato Grosso
region expectations are for this weeks trade to begin higher. Also adding to
the bullish opening could be short covering rally likely after the declines
on Friday. Technical traders indicate that the market should be well
supported and at $9.70 and resistance up to $10.64 in the November contract
for now. In other news the USDA confirmed soybean rust has been found in
Iowa. The commitment of traders report with options as of September 25th
shows funds long 130,396 soybeans up 8207 meal long 64,164 up 393 and oil
long 55,674 up 857. The Supplemental report showing index funds  soybeans
long 159,857 up 2082. China returned 460 mt of soybeans back to the US as
they claim the parcel contained live Khapra beetles, one of the most
destructive pests for grains, the China Daily said on Saturday. They claimed
the cargo also contained other live pets and weeds. Many feel this is a
continuation of retaliation for the US complaints of unsafe goods shipped
from China, including lead paint in children’s toys and toxic ingredients in
pet food.

Early Opening Calls: beans 3 to 5 higher, meal $3.00 higher. Bean oil .20
higher.

Top News

-- USDA late on Friday in a press release said they would not allow for
penalty free early withdrawl of lands in CRP. Acting Ag Sec did note 2 mln
acres will expire on Sept 30 and available for planting

-- Stats Canada will release production figures on Thursday morning.
Analysts do expect major changes to crops from its last survey on July 31

-- Russian sees 79 mln mt grain production in current marketing year, also
expects exports to be near 12 mln mt, acc. to Russian ag minister

-- 35,000 mt of S American soyoil being sought by Iran in a tender

-- The Commitment of Traders report with Options as of September 25 shows
Funds: Soybeans Long 130,396 up 8,207; Meal Long 64,164 up 393; Oil Long
55,674 up 857

-- Malaysian Palm were lower in overnight trade

-- SGS reports that Malaysian palm oil exports in Sept rose 11.9% from
August to 1.415 mln mt

-- Malaysian palm oil exports in Sept rose 11.7% from August to 1.381 mln
mt, acc. to shipper analyst Intertek

-- eCBOT Vol. 94,741; Pit Vol. 34,640; Open Interest Change: +3,899

-- Weather: Above Normal Temps. Normal to Above Precip. The Corn Belt will
see scattered showers and thunderstorms in the north today.

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

Cash Markets

--CIF Soybeans up 1 to 3 . Sept. +35 to +40, Oct. +34 to +38, Nov. +48 to
+54, Dec. +38 to +45, Jan. +45 to +48, Feb. +30 to ??, Mar. +35 to +37



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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