Linn Group Morning Soybean Comment

CHICAGO - Oct 11/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

November soybeans continued their strong upswing on Wednesday closing up 18
cents in the November contract. For the last 2 sessions beans have gained 42
¾ cents. The market opened better than expected and gave back some of their
gains early and firming into the close. Traders say much of the recent rally
is being fueled by rumors that the USDA has understated soybean acreage and
that they will slash their estimate for 2007 soy acreage. Dry weather in
northern Brazil remains a concern and adds support along with a weak dollar.
Volumes have been substantial during this rally, 163,791 soybeans traded
yesterday as well as 42,864 meal and 60,476 oil. In contrast corn traded
84,924 contracts approximately ½ of the volume of soybeans alone. Funds were
active buyers in the bean complex buying an estimated 6,000 soybeans, 3,000
meal and 3,000 oil.

Early opening calls are higher once again today with the overnight session
ending 2 ¾ cents higher. Traders say the firmer overnight trade implies
short covering ahead of Fridays much anticipated USDA report and a consensus
that the soybean numbers will be bullish. In other news State-run Taiwan
Sugar Corp will tender to buy 10,000 mt. of U.S. soybeans on Thursday. USDA
reports 130 tmt. beans sold to unknown. Oct. 18. U.S. FOB Gulf soybean and
corn basis offers held steady on Wednesday with soaring ocean freight
limiting export demand, traders said. Ocean freight rates at the U.S. Gulf
have soared in the past few days rising to $115 per mt. for a Panamax vessel
to Japan, up from $100 late last week. Soybean yields of 50 to 60 bushels
per acre are being reported in the northern Midwest while some southern
fields were yielding 10 bushels an acre or less due to a summer drought that
lasted all of August. The U.S. Agriculture Department will report on Friday
at 7:30 a.m. CDT  its latest estimate of the 2007 U.S. soybean crop.
Analysts consensus on average peg soybean production at 2.648 billion
bushels, reflecting an average yield of 41.949 bpa. That is up from USDA's
September forecast for a 2.619 billion-bushel crop and a yield of 41.4.
Overnight Chinese Soybeans, oil and meal closed higher. Malaysian crude palm
oil futures ended just 1.3 percent higher on Thursday as reports of profit
taking after the market posted a four-month high in the morning session on
surging soyoil and speculative buying.  Traders said prices were also
weighed down by the steadily strengthening ringgit against the dollar.

Early Opening Calls: 1 to 3c higher; soymeal steady to slightly higher;
soyoil 15-20 higher

Top News

-- USDA Weekly Export Sales data release delayed until Friday due to
Columbus Holiday on Monday

-- 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.

-- Total Brazil soybean planting area anticipated at 55 million acres, acc.
to the USDA attache. The attache says La Nina, currency strength, and slow
planting progress remain obstacles to a record Brazilian soybean harvest.

-- Total oilseed production world-wide expected to fall due to preferential
corn planting over soybeans; forecast down -3.8% in 07/08 to 382 mil tons
total, acc. to private analyst report

-- Dalian Soybean futures higher, active May 37 yuan/mt higher; soymeal &
soyoil futures higher also in overnight trade

-- Malaysian Palm oil futures rose 1.3% in ovenright trade, up 35 ringgit.
Traders noted weak $ weighed on prices as well as profit taking.

-- Holiday will keep Malaysia's palm oil futures markets closed Monday.

-- eCBOT Vol. 115,824; Pit Vol. 40,124; Open Interest Change: -914

-- Weather: Above Normal Temps. Normal to Above Precip. Corn Belt will be
dry into Saturday.

-- Outside markets. Energy: crude up before storage report, products sharply
higher ; Gold $6.90 higher & Silver: 16c higher; US $ off against Euro,
slightly higher vs Yen.

Cash Markets

--CIF Soybeans steady off 1. Oct. +25 to +33, LH Oct. +30 to +38, Nov. +45
to +53, Dec. +39 to +44, Jan. +43 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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