Linn Group Morning Soybean Comment

CHICAGO - Oct 5/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

A quiet trading session in soybeans on Thursday ending the day up 3 ¼ cents
in the November contract. Beans opened a couple cents better but quickly
broke eight cents to make their lows a few minutes into the session and
rallied to make their highs within the first hour. Traders say overall the
bean complex held together today and oil gained on meal. Oils gains can be
attributed somewhat to a sharp rally back in the energy markets. Reports of
tightening world supplies of veg oil is supportive.

Volumes were heavy again with the CBOT reporting 111,784 soybeans, 58,665
oil and 48,000 meal traded. Funds were a little quieter than in previous
sessions buying 1,500 beans, 3,000 oil and selling 1,000 meal.

Early opening calls for soybeans are 1 to 2 cents better. Farmers expect a
big harvest weekend. Some early harvest reports show lower than expected
yields which have been somewhat supportive but traders caution its early.
Dry weather in Brazil’s Mato Grosso soybean growing region has been a
concern but late reports of better than expected rainfall in the last 24
hours have helped to replenish soil moisture. Brazil released their first
official estimate for next years crop of between 59.4 to 61.3 mmt this is an
increase from 58.4 mmt. China is expected to be active next week in the cash
bean market after this weeks holiday curtailed purchases. Informa will
release their crop estimates at 10:30 today. Overnight Malaysian Palm oil
futures closed lower on reports of profit taking.

Early Opening Calls: slightly lower; soymeal steady; soyoil 10-15 lower

Top News

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

-- Private analyst Linn Group estimates total US corn production at 13.430
bil bushels, with a projected yield of 157.2 bpa

-- Private analyst Linn Group estimates total US soybean production at 2.602
bil bushels, with a projected yield of 41.38 bpa

-- Export Sales: Egyptian government procurement purchases 10k tons of
soybean oil, 15k tons of sun oil, acc. to traders

-- CONAB:  Brazilian Soybean Production pegged at 59.3 to 61.2 mil tons for
07/08 year

-- CONAB:  Brazilian Corn Production pegged at 51.8 to 52.8 mil tons for
07/08 year

-- USDA Argentina attache report sees 07/08 Soybean acreage increasing to 17
mln ha, more than a 5% increase over previous season.

-- USDA Argentina attache report sees 07/08 Soybean production reaching 47
mln mt just slightly below 06/07, the report assumes long term yields in its
calculations instead of above average yields seen in the most current year

-- Soybean re-planting may be necessary if precipitation doesn't reach
Center and Center/West Brazil soon, acc. to private analysts

-- Total of 12,000 mt of palm oil products sought in Oct 8 tender by India's
state trading company. 9,000 mt of crude palm sought, while the 3,000 mt
balance is refined palm olein for delivery in Mid November

-- Private analyst sees 57% of Brazil's sugarcane crop being consumed by
ethanol mills, +8% higher than the pace last year

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

-- Ceres CEO announces the development of sterile, 20 foot tall sorghum
plants to use as cellulosic ethanol feedstock - should yield between 15 and
20 tons per acre of biomass

-- Malaysian Palm

-- eCBOT Vol. 82,954; Pit Vol. 23,611; Open Interest Change: -4,870

-- Weather: 6 to 10 day Above Normal Temps. Normal to Above Precip.

-- Outside markets. Energy: crude lower, products lower; Gold lower & Silver
unchanged; US $ lower vs Euro, higher vs Yen

Cash Markets

                        Bean Barge       Corn Barge        SRW Barge
HRW Track       Ill Riv Frt

Oct                   +38/42 X           +56/58 Z           +30/ Z
+72/ Z               675

Nov                   +52/56 X           +63/65 Z           +35/ Z
+80/ Z               520

Dec                  +41/45 X           +62/64 Z           +40/ Z
+85/ Z               470

Truck                Beans   Corn     Wheat   Meal Hi-pro        Oil

Chicago            -40 X     -14 Z     -70 Z

Toledo               -50 X     -20 Z     -15 Z

Dec ILL             -35 X     -18 Z                 -16 Z
-150 Z



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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