Linn Group Morning Soybean Comment

CHICAGO - Oct 10/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybean prices surged on Tuesday closing 24 ¾ cents higher in the November
contract. The gains erased almost all of the losses from the previous 2
sessions as this market has lost 90 cents in the last 8 days. Traders say
with Tuesdays gap opening leaving behind the previous close adds strength to
the move technically. Many rumors surfaced Tuesday of a major adjustment in
Fridays USDA production estimates. Traders say talk of another 1 mil acre
reduction in planted acres and reduced harvested acres due to abandonment of
double crop beans and problems due to flooding that affected northern areas.
Exports for last week were slightly larger than the previous week as well
with weekly totals around 130 mil. bu compared to 105 to 107 for the last
two weeks. Volume was extremely heavy trading 184,834 soybeans, 42,372 meal
and 59, 481 oil. Funds were active buyers buying 6,000 beans, 2,500 meal and
2,500 oil.

Today’s early opening calls are higher following the overnight market which
ended and additional 17 ¾ cents higher on top of yesterdays gains. Weekly
condition reports released after the close show Soybean harvest at 50%
complete vs 29% last week, 43% last year and a 45% average. Minnesota and
Illinois were notably ahead of normal and crop conditions were up 1% to 58%
good to excellent. Estimates for Fridays Crop production report are at 41.95
bpa for beans with a crop of 2.648 bil. bu. This compares with the Sep USDA
report of 41.4 bpa and a crop of 2.619 bil bu. Mounting worries about hot
and dry weather in Brazil’s northern soybean growing areas persist adding to
the bean strength. Overnight Chinese Soybean, meal and oil futures closed
higher. Malaysian Palm oil futures closed higher.

Early Opening Calls: Beans 10 to 15 cents higher, meal $ 5.00 to $ 8.00
higher and oil. 20 to .40 higher.

Top News

-- Friday USDA releases latest monthly crop supply/demand & world ag
production figures. Analysts see soybean production at 2.65 mln bu and a
yield of 41.9 bu/ac.  Carryout is estimated to be 238 bu.

-- Analyst point to USDA's tendency to lower acreage in October report,
however the market is talking about a reduction of 2 mln acres, which would
be outside range of many estimates.

-- Dalian Soybean futures higher, active May +78 yuan/mt, soymeal & soyoil
futures were also higher as Chicago futures & Asian palm oil futures higher.

-- Malaysian Palm oil futures finished overnight 7 ringgit higher at 2,599
ringgit or about $768/mt

-- Intertek estimates Oct 1-10 Malaysian palm oil exports 11.9% higher at
462,292 mt from 413,299 mt in the same period of Sept

-- SGS estimates Oct 1-10 Malaysian total palm oil product exports 44%
higher at 484,670 mt from the 334,800 mt they estimated in same 10 days of
Sept

-- 94% of Saskatchewan's crops have been harvested according to latest
province ag report. Canola was 92% harvested up from 84% last week

-- Brazil's Abiove said August soybean crushings totaled 2.655 mln mt down
0.14 mln mt from year ago August

-- Argentine sunflower planting progress pegged at 16%, gaining slightly
over last week - +2.5%, but still -4.1% behind last year's pace, acc. to
BAGE

-- 2008 India rapeseed intervention price raised to $458.70/mt from
$437.05/mt

-- USDA Soybean Export Inspections: 17.998 mln bu for week ending Oct 4

-- USDA soybean progress shows in latest week that good-excellent conditions
rose 1% to 58%, while harvest pace rose to 50% vs last week's 21%.

-- DDQ launches 100% capital protected ag commodity fund, acc. to a company
statement - the organization is already running a protected general
commodity fund

-- eCBOT Vol. 132,392; Pit Vol. 43,967; Open Interest Change: -3,126

-- Weather: Above Normal Temps. Below Precip East, Above Precip West.

-- Outside markets: Energy complex: crude & active month products higher ;
Gold & Silver both higher; US $ lower vs Euro, up against the Yen

Cash Markets

--CIF Soybeans steady firm . Oct. +25 to +34, LH Oct. +32 to +37, Nov. +45
to +53, Dec. +38 to +42, Jan. +45 to +50, Feb. +30 to +42, Mar. +35 to +45



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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