Linn Group Morning Soybean Comment

CHICAGO - Oct 9/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean future prices fell sharply on Monday closing the November contract
down 15 cents. Traders say the main driver of the lower prices for soybeans
and soy products was wheat. The wheat market was limit down, hit by profit
taking and long liquidation by funds after record high prices. Soybeans were
also being pressured by some talk of rains in drier growing areas in Brazil.
A few showers were reported in Northern Brazil over the weekend but the
coverage was low and farmers indicate more rain is needed. Also adding to
the weakness yesterday was a $ 2.19 lower close in Crude Oil dragging bean
oil lower. Volumes were very heavy, trading 174,899 soybeans, 43,184 meal
and 60,629 soybean oil. Fund liquidation was heavy with funds selling an
estimated 5,000 soybeans, 2,000 oil and 2,000 meal.

Today's early opening calls are higher based on reports of lower than
expected yields in the US and an expected bounce from the sharp declines on
Monday. Continued concerns of hot and dry weather in Northern Brazil are
also somewhat supportive. Crude oil has firmed this morning up 36 cents in
the November contract adding some stability to bean oil. China is back in
the market traders say after last weeks holiday and expectations are for
them to step up soy purchases. Brazil grain analyst Celeres estimates Brazil
Soybean planting at 1% complete vs. 2% last year. They estimate the state of
Matto Grosso is 2% planted vs. 6% last year. Oil World said its tentative

Brazilian soybean crop estimate of 62.3 million mt. for early 2008 (up 3.0
million mt.) was in jeopardy due to critical weather and planting
conditions. This afternoon the USDA will release their weekly crop
conditions/progress report (delayed due to the Columbus day Holiday).
Overnight Chinese Soybean and Soybean Oil futures closed higher, Meal lower.
Malaysian Palm oil futures closed higher up 2%.

Early Opening Calls: higher. Beans 5 to 10 higher, meal $ 2.00 to $4.00
higher, Oil, .10 to .20 higher.

Top News

-- USDA will release Grain Export Inspections at 10:00 AM CDT, delayed a day
due to Columbus Day holiday

-- USDA will release Crop Progress/Conditions report at 3:00 PM CDT, delayed
a day due to Columbus Day holiday

-- Goldman Roll noted in the soybean spread trade Monday, acc. to floor
sources

-- Celeres weekly estimate of 07/08 forward soybean sales was unchanged in
latest week standing at 26%, the long term average forward sales for this
time period is 24%.

-- Satellite imaging company released US Corn & Soybean crop estimates
Monday, suggesting US Corn crop at 13.1 bln while Soybean crop was estimated
at 2.56 bln. Those figures compare to the USDA's Sept crop estimate at 13.3
bln & 2.62 bln of corn & soy respectively.

-- Lack of rain worrying to producers in Brazil, with soybean planting on
the horizon, acc. to trade groups

-- Industry official says nearly 1.3 mln mt of Indian soymeal have been
forward sold.  The bulk of the forward sales were to asian countries
including China, Japan, S Korea & Vietnam.

-- S Korea feedmills buy 45,000 mt of India soymeal for delivery between Jan
30 & Feb 15 late last week, officials say price was $399.50/mt

-- Dalian Soybean futures active May 9 yuan/mt higher, nearbys lower,
defereds higher. Soymeal futures mostly lower, soyoil futures mostly higher.

-- Malaysian Palm ends 50 ringgit higher at 2,592 ringgit/mt (about $763/mt)
as other Asian vegoil futures gained overnight.

-- Malaysian Palm Board releases September export, production, & stocks
figures Wednesday.

-- Private forecasters release Malaysian palm oil export figures on
Wednesday

-- eCBOT Vol. 122,797; Pit Vol. 47,576; Open Interest Change: +160

-- Weather: Above Normal Temps. Normal to Above Precip.

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

Cash Markets

--CIF Soybeans lower off 2 to 5 . Oct. +26 to +35, LH Oct. +30 to +37, Nov.
+44 to +54, Dec. +40 to +44, Jan. +46 to +50, Feb. +30 to +42, Mar. +37 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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