Linn Group Morning Soybean Comment

CHICAGO - Oct 4/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybeans recovered Wednesday to close 7 ¼ cents higher. Traders say there
was plenty of apprehension ahead of yesterdays open as many were expecting
price weakness from Tuesdays session to continue. The contrary occurred as
demand was quick to surface on lower futures in beans and both products.
Meal ended $3.10 higher and oil gained .10 higher.  The lows of the day in
beans were made on the open and within the first 15 minutes of trade the
market rallied back 15 cents and ended the session breaking 5 cents off
their highs. Traders say that once wheat started to trade higher the panic
selling that existed on Tuesday died down.  Volumes were heavy again 161,234
beans traded, 61,451 meal and 60,702 oil traded. Fund trade was heavy again
with funds buying an estimated 5,000 soybeans, 2,000 meal and 1,000 oil.

Today’s early opening calls are higher. USDA export sales came in line with
analyst expectations in beans, meal and oil. Stats Canada September
production estimates released today were below analysts expectations which
traders view as slightly bullish. Dryness persists in Brazil’s Mato Grosso
region causing planting delays to continue and this has been supportive to
the market. China is expected to be more active in the bean market next week
after this weeks holiday period ends. South American basis levels firmed
sharply in beans and products and some say this is an indication of more
active demand possibly out of China. Overnight Malaysian Palm oil futures
closed higher.

Early Opening Calls: beans are called 2 to 4 higher, meal $ 1.00 to $2.00
higher and oil .05 to .20 higher

Top News

**USDA Soybeans 07/08 Export Sales Net: 666,100 mt; 08/09 Net: none ;
expected 600,000-800,000

**USDA Soybean Meal 06/07 Export Sales Net: 52,500 mt; 07/08 Export Sales
Net: 135,900 mt; expected 70-125,000

**USDA Soybean Oil 06/07 Export Sales Net: 28,900 mt; 07/08 Export Sales
Net: -3,000 mt; expected 5-10,000

**Stats Canada Sept Production Estimates, Canola:  -1.5% to 8.86 mil tons,
expected = 9.2 mil

**Stats Canada Sept Production Estimates, Flaxseed:  -36.8% to 625k tons

-- August US Soyoil Stocks in Mills/Warehouses: 3.038 Bln lbs

-- Thursday Informa will release updated corn & soybean production numbers.

-- Iran has purchased 35k tons of soybean oil at tender from
Brazil/Argentina, shipment set for November, acc. to traders

-- Senate Finance Committee Chariman Max Baucus unveiled a new farm bill
that would scale back income tax credits available to those who blend
ethanol with gasoline from $0.51 to $0.46.

-- USDA-sponsored Renewable Energy Conference WIREC to be held in DC on
March 4-6 of 2008

-- German legislators said to be considering lifting taxes levied against
the country's biodiesel industry, following reports of plant slow-downs or
outright closures

-- French producers and trade unions strongly encourage the country's
legislature to allow GMO crops in order to stay competitive with the world
as debate on the subject continues

-- Grain said to cost $3/bu more to ship from South American destinations to
Asia than North American to Asia, acc. to contacts in the freight industry

-- European Union extends poultry ban to Canada after bird flu was detected
in a farm in Saskatchewan, acc. to gov sources

-- Soybean rust spread ahead of last year's pace; 158 counties compared to
88 in October 2006 - SW Kentucky county becomes the latest

-- Deliveries on October CBOT contracts total 3600 for Soybean Oil, 1350 for
Soybean Meal, acc. to reports

-- eCBOT Vol. 118,053; Pit Vol. 37,918; Open Interest Change: +11,453

-- Weather: Above Normal Temps. Normal to Above Precip. The Corn Belt looks
dry today into Saturday.

-- Outside markets. Energy: crude & products lower; Gold & Silver: both
lower; US $ down slightly vs Euro & Yen

Cash Markets

--CIF Soybeans up 1-2 . Oct. +36 to +??, LH Oct. +42 to +50, Nov. +50 to
+58, Dec. +38 to +45, Jan. +47 to +52, Feb. +30 to ??, Mar. +35 to +??



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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