Soybeans recovered Wednesday to close 7 ¼ cents higher. Traders say there was plenty of apprehension ahead of yesterdays open as many were expecting price weakness from Tuesdays session to continue. The contrary occurred as demand was quick to surface on lower futures in beans and both products. Meal ended $3.10 higher and oil gained .10 higher. The lows of the day in beans were made on the open and within the first 15 minutes of trade the market rallied back 15 cents and ended the session breaking 5 cents off their highs. Traders say that once wheat started to trade higher the panic selling that existed on Tuesday died down. Volumes were heavy again 161,234 beans traded, 61,451 meal and 60,702 oil traded. Fund trade was heavy again with funds buying an estimated 5,000 soybeans, 2,000 meal and 1,000 oil.

Today's early opening calls are higher. USDA export sales came in line with analyst expectations in beans, meal and oil. Stats Canada September production estimates released today were below analysts expectations which traders view as slightly bullish. Dryness persists in Brazil's Mato Grosso region causing planting delays to continue and this has been supportive to the market. China is expected to be more active in the bean market next week after this weeks holiday period ends. South American basis levels firmed sharply in beans and products and some say this is an indication of more active demand possibly out of China. Overnight Malaysian Palm oil futures closed higher.

Early Opening Calls: beans are called 2 to 4 higher, meal $ 1.00 to $2.00 higher and oil .05 to .20 higher

Top News

**USDA Soybeans 07/08 Export Sales Net: 666,100 mt; 08/09 Net: none ; expected 600,000-800,000

**USDA Soybean Meal 06/07 Export Sales Net: 52,500 mt; 07/08 Export Sales Net: 135,900 mt; expected 70-125,000

**USDA Soybean Oil 06/07 Export Sales Net: 28,900 mt; 07/08 Export Sales Net: -3,000 mt; expected 5-10,000

**Stats Canada Sept Production Estimates, Canola: -1.5% to 8.86 mil tons, expected = 9.2 mil

**Stats Canada Sept Production Estimates, Flaxseed: -36.8% to 625k tons

-- August US Soyoil Stocks in Mills/Warehouses: 3.038 Bln lbs

-- Thursday Informa will release updated corn & soybean production numbers.

-- Iran has purchased 35k tons of soybean oil at tender from Brazil/Argentina, shipment set for November, acc. to traders

-- Senate Finance Committee Chariman Max Baucus unveiled a new farm bill that would scale back income tax credits available to those who blend ethanol with gasoline from $0.51 to $0.46.

-- USDA-sponsored Renewable Energy Conference WIREC to be held in DC on March 4-6 of 2008

-- German legislators said to be considering lifting taxes levied against the country's biodiesel industry, following reports of plant slow-downs or outright closures

-- French producers and trade unions strongly encourage the country's legislature to allow GMO crops in order to stay competitive with the world as debate on the subject continues

-- Grain said to cost $3/bu more to ship from South American destinations to Asia than North American to Asia, acc. to contacts in the freight industry

-- European Union extends poultry ban to Canada after bird flu was detected in a farm in Saskatchewan, acc. to gov sources

-- Soybean rust spread ahead of last year's pace; 158 counties compared to 88 in October 2006 - SW Kentucky county becomes the latest

-- Deliveries on October CBOT contracts total 3600 for Soybean Oil, 1350 for Soybean Meal, acc. to reports

-- eCBOT Vol. 118,053; Pit Vol. 37,918; Open Interest Change: +11,453

-- Weather: Above Normal Temps. Normal to Above Precip. The Corn Belt looks dry today into Saturday.

-- Outside markets. Energy: crude & products lower; Gold & Silver: both lower; US $ down slightly vs Euro & Yen

Cash Markets

--CIF Soybeans up 1-2 . Oct. +36 to +??, LH Oct. +42 to +50, Nov. +50 to +58, Dec. +38 to +45, Jan. +47 to +52, Feb. +30 to ??, Mar. +35 to +??

Nathan T. Smith III

Linn Group

nsmith@linngroup.com

toll free: (877) 787-6278

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