Soybeans rallied to a three year high on Thursday closing 18 ¼ cent higher in the November contract. This close is only the second time in history that the November soybean contract has closed above $ 10.00. Volume was extremely heavy on Thursday trading 147,030 soybeans, 68,837 soybean oil and 80,157 soybean meal. Funds bought an estimated 9,000 soybeans, 3,000 oil and 3,000 meal.

Early calls are expected to be lower after USDA's U.S. Sept. 1 soybean stocks figure came in above trade expectations. The USDA Quarterly stocks report shows stocks of 572.778 mil bu. this came in above analysts expectations of 553 mil bu. 120,000 mt of US Soybeans sold to China for 07.08 delivery USDA reports Friday. Traders say it is interesting to note that soybean prices are higher as a result of a potentially tight stock scenario and not the result of significant crop problems. The US dollars slide has contributed to this rally traders say. The US dollar sank to a record low Thursday against an index of major currencies. Malaysian planter Kwantas Corp plans to quadruple its plantation land by 2013 due to surging demand for palm oil according to a Reuters report this morning. Overnight Chinese Soybean futures closed at record highs. Malaysian Palm oil futures closed higher.

Early Opening Calls: 5 to 10c lower; Soymeal $1 lower; Soyoil 10-15c lower

Top News

**US Corn Qtrly Grain Stocks: 1.304 bln bu.; est 1.15; Jun07 3.534 bln bu.; Sep '06 = 1.967

**US Soybeans Qtrly Grain Stocks: 0.573 bln bu.; est 0.55; Jun07 1.091 bln bu.; Sep '06 = 0.449

**US Wheat Qtrly Grain Stocks: 1.717 bln bu.; est 1.83; Jun07 0.456 bln bu.; June '06 = 1.751

-- 120,000 mt of US Soybeans sold to China for 07.08 delivery USDA reports Friday

-- 15,000 T sunflower tender floated by Egypt's FIHC, acc. to market sources

-- Indonesia trade ministry keeps October export tax rates unchanged, but will adjust base price for exports of crude palm oil to $760/mt from current $733/mt

-- Dalian Soybean futures slightly higer in active May futures, Meal mixed, nearby higher, deferreds lower, soyoil strong.

-- Malaysian Palm futures higher on strong soyoil futures.

-- eCBOT Vol. 106,720; Pit Vol. 34,688; Open Interest Change: +6,533

-- Weather: Above Normal Temps. Normal Precip. The Corn Belt will be dry today into Sunday.

-- Outside markets: Energy complex higher; Gold & Silver both sharply higher; US $ lower again.

Cash Markets

--CIF Soybeans steady off 5. Sept. +34 to +40, Oct. +32 to +37, Nov. +46 to +54, Dec. +32 to +45, Jan. +42 to +48, Feb. +30 to ??, Mar. +35 to +37

Nathan T. Smith III

Linn Group

nsmith@linngroup.com

toll free: (877) 787-6278

local: (312) 896-2090

fax: (312) 896-2050

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