Linn Group Morning Soybean Comment

CHICAGO - Oct 12/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

Soybeans ended up 13 ¼ cents in the November contract. This is the third
consecutive higher close and interesting to note a strong close ahead of the
widely anticipated USDA crop production numbers released this morning.
Supportive factors include a weakening dollar and rumors of a downward
revision in soybean acres in the USDA report. Meal and oil have been strong
most of the week traders say, due to improving South American basis levels
and new tenders for products especially from China. Dryness continues in
Brazil’s No1 soybean state Mato Grosso, which has delayed planting, but
forecasters say rains are expected this weekend. Volume on Thursday was
heavy 166,979 soybeans traded, 48,705 meal and 67,458 oil. Funds bought an
estimated 4,000 beans, 1,000 meal and 2,000 oil.

The USDA released their October Crop production report this morning showing
soy production at 2.598 billion bushels, below an average of analysts'
estimates for 2.648 billion and below USDA's forecast in September for 2.619
billion.  USDA forecast 2007/08 U.S. soy ending stocks at 215 million
bushels, below an average of analysts' estimates for 229 million and
unchanged from USDA's forecast in September for 215 million. USDA also
released weekly export sales today (delayed due to Mondays holiday) at
550,100 mt. below estimates for 600,000 to 900,000 mt. USDA said 624,500 mt
of U.S. soymeal sold for export last week, above estimates for 50,000 to
150,000 mt. USDA said 58,200 mt. of U.S. soyoil sold for export last week,
above estimates for 5,000 to 15,000 mt. Chinese crushers have cancelled two
US soy cargoes due to poor crushing margins. China has bought more than 10
US soy cargoes in the last few days and reports are that they bought too
much. The consensus of analysts this morning, is that with this report now
behind us and with bean carry out much lower than anticipated that $10.60
beans and $300 meal could be right in front of us. Overnight Chinese Soybean
and Meal Futures closed mixed. Malaysian Palm oil futures closed into new
highs.

Early Opening Calls: Beans 10 higher,

Top News

**US Oct Soybean 07/08 Crop Prod: 2.598 bln bu.; est. 2.65 bln bu. Sept Rpt
2.619

**US Oct Soybean 07/08 Yield: 41.4 bu/ac; est. 42.0 bu/ac; Sept Rpt 41.4
bu/ac

**US Oct Soybean 07/08 Carryout: 0.215 bln bu. ; est. 0.24; Sept Rpt 0.215

**US Oct Soymeal 07/08 Carryout: 300,000 T ; Sept Rpt 300,000

**US Oct Soyoil 07/08 Carryout: 1.930 bln lbs. ; Sept Rpt 1.735

**Oct Brazil 07/08 Soybean Output: 62.0 mmt; Sept Rpt 61.0

**Oct China 07/08 Wheat Output:  105.0 mmt; Sept Rpt 105.0

**Oct China 07/08 Soybean Output: 14.6 mmt; Sept Rpt 15.2

**World 07/08 Soybeans Carryout: 50.75 mmt; Sept Rpt 51.35

**World 07/08 Soymeal Carryout: 5.78 mmt; Sept Rpt 5.70

**World 07/08 Soyoil Carryout: 2.48 mmt; Sept Rpt 2.44

**USDA Soybeans 07/08 Export Sales Net: 0.550 mln mt; 08/09 Net: none ;
expected 600,000-850,000

**USDA Soybean Meal 07/08 Export Sales Net: 266,000 mt; 08/09 Export Sales
Net: 7,000 mt; expected 50-150,000

**USDA Soybean Oil 07/08 Export Sales Net: 8,200 mt; 08/09 Export Sales Net:
none mt; expected 5-20,000

-- USDA reports private sale for 07/08 of 130,000 mt of US Soybeans to
Unknown destination

-- Taiwan's Taisugar looking to buy 10k tons of soybeans from the United
States, looking for container shipment before the end of January, acc. to
traders

-- EU authorities have been investigating collusive activites between
several freight forwarding companies operating in the bloc, acc. to gov
sources

-- The subprime credit crunch may lead many investors to pursue assets with
a commodity markets backing, possibly through a security known as a CCO's,
or CDO's

-- NOAA sees La Nina weather phenomenon gaining strength, should last until
2008 at the earliest - more rain for PNW USA, less for SW USA

-- Dalian Soybean futures lower; soymeal futures off 7 yuan/mt on 453,000
traded contracts; soyoil active May 60 yuan/mt higher.

-- Malaysian Palm Oil futures leapt +2% overnight to $811/ton - closing in
on all-time highs due to buoyant soy and crude oil values

-- eCBOT Vol. 113,617; Pit Vol. 47,701; Open Interest Change: +2,962

-- Weather: Above Normal Temps. Normal to Above Precip.-- Outside markets:
Energy complex: front month crude higher, rest lower; products lower ; Gold
& Silver both lower; US $ higher on Friday vs Euro & Yen.

Cash Markets

--CIF Soybeans steady off 2 to 7 . Oct. +22 to +25, LH Oct. +24 to +33, Nov.
+36 to +45, Dec. +35 to +40, Jan. +44 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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