Soybeans took a respite on Tuesday after the recent price rally closing down 6 ¼ cents in the Jan contract as Jan takes over as front month. After opening slightly lower the market made its highs within the first minute of trade and spent most of the session down approximately 10 cents before attempting to rally into the close. Traders say the market was pressured on the news that rain coverage was better than expected for Northern Brazil, which should help farmers to get the area planted. Soybean oil was the leader closing higher by 17 tics led higher by surging crude oil prices. Front month crude oil traded to record highs yesterday posting a high of $88.14 in the Nov contract. Volume was heavy again at the CBOT which reported volume of 112,374 soybeans, 47,085 soybean oil and 38,779 meal traded. Funds were all on the sell side selling a net 4,000 soybeans, 2,000 meal and bought 1,500 oil.

Today's early opening calls are weaker. Bearish factors include a wet end to harvest here in the US delaying completion of harvest. Crop weather in South America has improved with rains in dry areas of Brazil and drier weather in soggy soy areas of Argentina seen helping crop prospects. Stabilizing Crude oil prices are also seen as weighing on prices traders say. Taiwan is reported to have passed on a tender to buy between 40,000 mt to 60,000 mt of either US or South American soy. Malaysian Palm oil futures dropped nearly 2% overnight on what is being reported as profit taking. Traders say this was to be expected after surging more than 10% in six straight days of trading. Overnight Chinese soybeans and meal closed lower.

Early Opening Calls: 5 to 7c lower; Soymeal $1-2 lower; Soyoil steady to 5 lower

Top News

-- High prices given as excuse for Taiwan to pass on 60,000 mt soybean tender Wednesday.

-- Oct 1-15 palm oil exports from Malaysia were pegged at 679,512 mt a rise of 13.0% vs Sep 1-15 period, acc. to SGS

-- Oct 1-15 palm oil exports from Malaysia were pegged at 671,741 mt a rise of 6.4% vs Sep 1-15 period, acc. to Intertek Testing Services

-- In its latest move to contain potential food price inflation, the Russian government could possibly levy duties on exports of veg oil, lift duties on imports, or both, acc. to the country's Economy Minister

-- Aflatoxin confirmed in northeast Iowa and Nebraska.

-- October cattle on feed report will be released on Friday, early sample of analysts see On-Feed at 94-97% of year ago numbers, while Marketings during Sept were in a range of 94-98 & placement of animals on feedlots ranged at 102-112% of year ago figures.

-- Dalian Soybean futures lower, active May soymeal & soyoil futures were lower overnight also.

-- Malaysian Palm Oil declined very slightly overnight, falling -0.3% to $814/ton following yesterday's record close; this pause may result in some profit-taking, acc. to analysts

-- eCBOT Vol. 75,638; Pit Vol. 33,813; Open Interest Change: +2,665

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

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

Cash Markets

--CIF Soybeans steady up 3 . Oct. +14 to +25, LH Oct. +18 to +25, Nov. +35 to +40, Dec. +32 to +42, Jan. +42 to +49, Feb. +25 to +38, Mar. +35 to +42, Apr. +30 to +40.

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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