Neumann had five birdies and one bogey for a 4-under 68 on the Barseback course, where Sorenstam helped Europe win the 2003 Solheim Cup.
Sorenstam, who is hosting the tournament, shared second place with Carin Koch and Marta Prieto.
The 39-year-old Neumann finished tied for fifth in last week's Women's British Open at Royal Birkdale.
'I switched coaches two and a half years ago and since then I've been playing much better,' Neumann said. 'Thanks to Henri Reis my swing is better and it gives me confidence.'
Reis, one of Sweden's most renowned golf coaches, has worked with Sorenstam for many years.
Sorenstam three-putted No. 7 for her first bogey, and then mishit a chip on the 14th that led to another dropped shot. She made it up with birdies on the sixth, eighth, 12th and 17th holes.
'It wasn't that bad, but I made a few mistakes out there,' Sorenstam said. 'It's been a hectic week as tournament host.'
The 34-year-old Sorenstam has lived in the United States since 1990 and visits her native country once or twice a year, and always for the annual Ladies European Tour event in Sweden.
Last year, Sorenstam won the event, then known as the HP Open. Since 1996, she has won LET tournaments five times in Sweden.
Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.