Linn Group Morning Soybean Comment

CHICAGO - Oct 2/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

November Soybeans ended just ¼ cent higher after trading in a narrow 7 ¾
cent range. Beans were higher most of the trading session but weakened
towards the close. This was only the 3rd time in the last month and a half
that beans were kept in a range less than 10 cents. Volume was heavy despite
the narrow range trade, 103,042 soybean volume, 57,359 oil and 45,744 meal.
Traders say wheat trading higher helped beans as did dry conditions in
Brazil. Conditions are expected to stay dry in Mato Grosso for the next week
and traders say this is supportive for the time being. Funds on Monday sold
an estimated 3,000 soybean oil, bought 1,000 soybeans and 2,500 meal.

Overnight grain markets were weaker with beans being the leader down 11
cents. Overnight markets were under pressure in general on talks of traders
taking profits in gold and crude oil as well. Yesterday after the close the
USDA released the weekly crop progress reports showing soybean harvest 29%
complete vs 12% complete last week and 18% last year and 24% average.
Conditions declined slightly down 1% to 57 Good to Excellent. FC stone
issued a new soybean estimate at 2.72 bil. bu vs. their September estimate
of 2.682 and the USDA’s September estimate of 2.619 mil. bu. Brazil grain
analyst Celeres estimated the 2007/08 Brazil Soybean Production at 63.0 mmt
up 2.6% from their previous estimate and up 6.9% from last year. Export
demand is expected to be slow this week with China on holiday. Overnight
Malaysian Palm Oil Futures closed sharply lower.

Early Opening Calls: Beans 11-12c lower; soyoil 20-25 lower; soymeal $2
lower

Top News

-- FC Stone estimates 2007 US Corn production at 13.445 Bln bu in latest
report vs prior report of 13.062 Bln on yield of 157.4 bpa, sees US Soybean
crop at 2.722 Bln bu in latest report vs 2.682 Bln bu. on avg yield of 43
bpa.

-- In its latest report Celeres estimates Brazil's 2007/08 soybean crop at
63 mln mt vs 58 mln mt.  The group sees acres rising to 22.5 mln ha. On
exports they expect 26.7 mln mt exported vs lst years 25 mln mt.

-- Celeres estimates 26% of 2007/08 soybean crop has been forward sold, up
1% point from last week

-- USDA Soybean crop good to excellent conditions fell 1% to 57% in latest
week, while very poor to poor rose 1% to 17%.  Harvest was at a 29% pace,
17% points ahead of prior week & vs 24% 5 yr avg.

-- Farmer's trade association executive in Nebraska estimates the state
could produce 1 bil gallons of ethanol yearly, with current consumption at
816 million, could mean the state would be self-sufficient if cars could be
converted to 100% ethanol blend

-- Argentina sunflower oilseed planting crawls along, gaining only +1.3%
from last week; pegged at 13.5% - same time last year = 17.6%

-- Argentina's corn crop nearly 10% planted as of last Friday, gaining over
+4% from the previous week, but still behind last year's 12% pace, acc. to
BAGE

-- Timely rains assisting Argentine wheat development, with 73% of the crop
declared "good to excellent", acc. to the BAGE

-- Texas A & M and Ceres Inc are attempting to develop cellulosic ethanol
based upon cane sorghum feedstock; developing efficient strains and
researching enzymes

-- Stats Canada numbers on Thursday eagerly awaited by wheat traders;
average total production estimates are between 19.6 and 20.5 mil tons

-- Senate Ag Committee will work out markup details on the upcoming US Farm
Bill on Wednesday, acc. to gov sources

======================

Monday's Export Inspections Recap

Wheat Export Inspections:  39.384 mln mt; expected 37.5 mln mt, previous =
41.387

Corn Export Inspections:  42.994 mln mt; expected 40.5 mln mt, previous =
45.354

Soybeans Export Inspections:  11.152 mln mt; expected 18.0 mln mt, previous
= 16.722

======================

-- Malaysian Palm December futures finished sharply lower off 49 ringgit, as
weak crude oil & soyoil markets weigh on prices

-- eCBOT Vol. 71,482; Pit Vol. 25,782; Open Interest Change: +4,779

-- Weather: Above Normal Temps. Normal to Above Precip. Scattered showers
and thunderstorms will move west to east across the Corn Belt today

-- Outside markets. Energy lower; Gold & Silver: sharply lower; US $ sharply
higher vs Euro, but flat vs Yen.

Cash Markets

--CIF Soybeans off 1-3 . Sept. +30 to +??, Oct. +31 to +35, Nov. +46 to +52,
Dec. +33 to +44, Jan. +44 to +48, Feb. +30 to ??, Mar. +30 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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