Linn Group Morning Soybean Comment

CHICAGO - Mar 3/08 - SNS -- Following is the morning soybean futures comment from the futures commission brokerage firm Linn Group.

What can you say about the soybean and soybean oil markets as they lead all
the grains higher.  The May and July beans closed over 20 cents higher and
the November was 2 cents higher, allowing the bulls spread to work great the
last couple of days.  The bean oil closed off the highs made toward the end
of the day, but still very strong up over $1.50 in most of the front month
contracts.  Traders pointed to not only speculative buying in the rally in
the soy complex, but also technical buying and commercial support.  Traders
also pointed to strong bull spreading as tightening stocks are putting new
pressure on the old crop months and the anticipation of a huge increase in
bean acres is keeping a lid on a big rally in the new crop prices.  Traders
said we are still not seeing any rationing of demand.  The move to higher
prices seems to be the place the market wants to go as there is no reason to
think a top is in the market.  Volume was good and funds bot 4,000
contracts.  China remains the wild card as they continue to buy US beans and
bean oil.

Overnight, the bean market took off again with the bean oil market trading
limit up only to come just off at the end of the day.  The July bean oil
closed limit up overnight and the July beans were up almost 30 cents.  The
story of the grain markets seems to be the bean complex as it continues to
make new highs, being led by the bean oil market.  The demand worldwide for
oil seeds remains very strong and there doesn't seem to be any reason for
that to change anytime soon.  China remains the dominate player in the bean
complex as they are in the market buying US beans and bean oil and as we
know, there appetite is huge.  Palm oil prices were up very big overnight in
the far east helping the US markets to move higher.  Outside markets are
very strong helping to push the grain markets into new highs even as it
seems like everybody across the world is trying to plant as many acres as
possible.

Globex Overnight

Contract            Last      Net Change       High      Low

ZSH8                1555^0  33^0                  1560^0  1519^4

ZSK8                1567^4  31^0                  1576^4  1534^0

ZSQ8                1554^2  39^2                  1559^0  1529^0

ZSU8                1495^6  40^6                  1499^2  1474^2

ZSX8                 1448^0  22^0                  1449^0  1421^2

Early Opening Calls: 25-30 cents better

Top News

-- In effort to keep domestic prices stable, Soy & Palm oil exports have
been banned by Bangladesh

-- Malaysian Palm oil futures had largest daily price rise ever jumping 327
ringgit, or +8.2%, to 4,332 ringgit ($1=3.19)

-- COFCO, a Chinese food buying arm, analysts there expect Chinese March
soyoil imports to fall to 220,000 mt from Feb's 370,000 mt.  April's soyoil
imports are expected at 200,000 mt about 20,000 mt lower than the March
estimate.

-- Industry group sees India's 2008 rapeseed crop falling 15% to 5.09 mln mt
on damage caused by cold weather, that's below the country's Ag ministry
late Feb estimate of 6.7 mln mt

-- Shipping index on the Baltic Exchange is expected to rise in the near
term, analysts point to continued demand by iron & coal shippers & the
beginning of the S American harvest will press the index upward.

-- March 7 is first day of Goldman Sachs commodity index roll period

-- Dalian Jan Soybean futures rose 142 Yuan and settled Monday at 4,924
Yuan/mt; Soymeal futures settled +112 to 3,712 Yuan/mt; Soyoil futures again
sharply higher to 14,080 a rise of 470 from Friday's settle.  Sept Palm oil
futures were 452 pts higher at 12,472 Yuan/mt ($1=7.10 Yuan)

-- Malaysian Palm Oil futures May contract was up 327 ringgit to a new
record high of 4,332 ringgit ($1,355)m/t, before settling up 325 ringgit at
4,330 ringgit.

-- Globex Soybean Vol. 121,443; Pit Vol. 36,890; Open Interest Change: -247

-- Weather: 6-10 Day forecast: Normal to Below Temps. Normal to Below
Precip. The Corn Belt will see rain and snow today and Tuesday. Wednesday
into Sunday looks mostly dry. Temps near to below normal.

-- Outside markets: Energy Complex +0.54 at $102.38; Gold & Silver: +13.1 at
$987.7 & +0.330 at $20.120; US $ is down slightly vs. Euro & is down vs. Yen

Cash Markets

-- CIF Soybeans steady off 20 . Feb. +55 to +??, FH Mar. +23 to +??, Mar.
+15 to +20, Apr. +13 to +27, May +22 to +33, June +17 to +35, July +20 to
+35.

TREND:

The bean complex has taken over leadership role. Counts in front month beans
to $19 to 20. Oil counts to 90 cents and could do more. Meal continues to
gain with new high closes. Trade to $500 not out of the question. The old
new spreads in beans making a stand based on increased US acres this spring.
Not sure the cash warrants this with big discounts in basis out of So Amer
new crop.



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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