Linn Group Morning Soybean Comment

CHICAGO - Oct 16/07 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

November soybeans ended Monday’s session up 10 ¾ cents. Traders say the
market showed it’s strength after Fridays 4 ¾ cent lower close. Monday’s
session began a dime higher and drifted lower until a 6 cent rally in the
last 10 minutes of trade brought the market higher into the close.  Traders
say the market was supported by wet harvest weather west of the Mississippi
river, rising crude oil and a weakening dollar added to the price gains
Monday. The CBOT reported heavy volume on Monday in the bean complex
131,055, 32,250 meal and 28,148 oil soybean contracts traded. Funds bought
5,000 soybeans, 3,000 meal and 3,000 oil.

Early opening calls for beans are 2 to 4 cents higher today. Influencing
today’s trade are soaring Crude oil prices. Overnight, front month crude is
up 94 cents trading just 3 cents off $88.00 per barrel. Yesterday after the
close the USDA released weekly crop progress showing soybean harvest 66%
complete vs. 50% last week ,  66% last year and an annual average of 65%.
Brazil grain analyst AgRural issued a new estimate for the 2007/08 soybean
crop at 62.8 mmt vs. previous estimate of 63.3 mmt. Ocean freight rates for
dry commodities on major Asian routes rose more than 11 percent on Tuesday,
compared with a week ago, bolstered by strong bids from a tonnage market
long on demand and short on supply. Overnight Chinese soybeans , meal and
oil closed higher. Malaysian palm oil futures closed higher again into new
record highs.

Opening calls: beans 2 to 4 higher, meal .50 to $1.00 higher, oil .20 to .40
higher.

Top News

-- Export News: Taiwan seeking 60,000 mt of S American or US soybeans at
upcoming Wednesday tender, acc. to traders

-- Soybeans were 97% dropping leaves in latest USDA data released Monday.
Harvest pace was 66% complete, that was 16% points ahead of last week &
inline with year ago pace & 1% point ahead of long term average.

-- October cattle on feed report will be released on Friday, small early
sample of analysts see On-Feed at 95-97% of year ago numbers, while
Marketings during Sept were in a range of 95-97 & placement of animals on
feedlots ranged at 105-111% of year ago figures.

-- Exports of raw sunseed oil from Ukraine escape export restrictions by
gov't, however, gov't mulling an export quota of 40,000 mt bottled sunseed
oil beginning Nov 1 thru the end of 2007

-- Despite drought conditions in Northeast China, gov't official says China
could harvest 500 mln mt of Grains this year.

-- Palm oil futures launch on Dalian exchange Oct 29th

-- Dalian Soybean futures were higher in overnight trade, soymeal & soyoil
futures were also stronger overnight.

-- Malaysian Palm oil futures ended at record high in overnight trade up 73
ringgit to 2,791 ringgit a rise of 2.7% , as soyoil futures were higher &
crude oil futures traded to all time highs in overnight electronic markets.

-- eCBOT Soybean Vol. 90,248; Pit Vol. 34,719; Open Interest Change: -2,796

-- Weather: Normal to Below Temps. Normal to Below Precip. The Corn Belt
will see chances of scattered showers and thunderstorms today into Friday.

-- Outside markets. Energy: crude futures makes new all time high overnight
at $87.97/bbl ; Gold & Silver: both lower; US $ slightly higher vs Euro,
lower vs Yen.

Cash Markets

--CIF Soybeans off 2 to 4 . Oct. +10 to +20, LH Oct. +17 to +25, Nov. +35 to
+40, Dec. +32 to +42, Jan. +42 to +49, Feb. +25 to +38, Mar. +35 to +42



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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