January Soybeans closed 19 ¼ cents lower on Thursday in a volatile session. Soybean futures at the Chicago Board of Trade were called 3 to 5 cents per bushel higher on Thursday on follow-through technical buying after making contract highs overnight and on good export sales data, traders said. But the calls were easing as crude oil tumbled, down more than $2 a barrel. The session was marred by what appeared to be a mechanical system error on the ECBOT screen. In the opening 2 minutes of trade Jan Beans traded in a 42 ½ cent range. The price volatility was not limited to Soybeans alone. Front month December Soybean oil traded in a range of 136 pts from 42.39 to 41.03 and settled at 42.07 down 24 points. Traders say pressure from a sell-off in the crude oil market had a major impact on Thursday's price action in the bean complex. Volume was heavy on Thursday, 179,805 Soybeans, 65,924 Bean Oil and 65,377 Meal. Funds sold an estimated 7,000 soybeans 2,000 Oil and 4,000 Meal.

Early opening calls are slightly higher. For the last several sessions the grain and oilseed markets have been under the influence of outside markets, Crude, US Dollar and Gold and traders indicate they expect that to continue. Firm crude oil today and a weak dollar are expected to support the soy market in addition to a technical short-covering bounce after the sharp declines on Thursday. FC Stone released their estimate for U.S. soy production on Thursday and they were below the company's previous forecast but above USDA's current outlook. Their Soybean yields were forecast at 42.2 bpa vs. 41.4 from the USDA. As expected Taiwan overnight bought 12,000 mt. of U.S. soy. Overnight. Chinese Soybean, Meal and Oil futures closed lower. Malaysian Palm Oil futures closed slightly lower.

Early Opening Calls: 2 to 3c higher; Soymeal steady to +$1; Soyoil steady

Top News

**US Census Bureau estimates September soybean oil stocks at 2.912 bil lb

**US Census Bureau pegs September Soybean Oil Production at 1.422 bil lb, slightly higher than the previous month and same time last year

-- US Farm Bill debate continues in the Senate - Majority Leader quoted as saying it may be done within a week, but other legislature may compete for time

-- FC Stove Nov production estimates US Soybean production at 2.651 bil.bu. vs. September estimate Of 2.772

-- Taiwan tendering for 23,000 mt. US Corn and 12,000 Soybeans for Dec

-- Exports of Soymeal during October were 1.2 mln mt from the prior month, while Soyoil exports were 193,700 mt during October, acc. to Brazilian Gov't

-- Potential demand from Indian biofuel producers said to be supporting robust regional vegetable oil prices, suggest analysts

-- CBOT Soybean Deliveries: 28 thru October 16

-- Dalian Soybean futures 32 yuan/mt lower basis the May contract; Soymeal finished 51 yuan/mt lower at 3283; Soyoil futures sharply lower off 86 yuan/mt to 8860 yuan/mt

-- Malaysian palm oil declined slightly overnight, finishing at $873/ton, analysts see profit-taking

-- eCBOT Soybean Vol. 133,999; Pit Vol. 38,394; Open Interest Change: -4,247

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Below Precip.

-- Outside markets. Energy: Crude 25c higher at 93.73/bbl, product higher also ; Gold $4.00 higher & Silver: slightly higher; US $ mixed, lower vs Euro, slightly higher vs Yen.

Cash Markets

--CIF Soybeans steady . Nov. +31F to +40F, Dec. +44 to +50, Jan. +49 to +55, Feb. +33 to +42, Mar. +38 to +43, Apr. +37 to +40, May +37 to +40, J/J +35 to +45.

Nathan T. Smith III

Linn Group

nsmith@linngroup.com

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