Soybeans rallied after the release of the USDA crop production report released early Friday morning. The January Soybean contract ended Fridays session 14 ¾ cents higher. Traders said all the strength was in the soy complex. China' activity in the beans and the firmer crude oil market kept the market firm. The USDA confirmed that China bought 115,000 MT of 2007/08 Soybeans within the past day and there were more rumors that China bought 55,000 mt. of U.S. Soybean oil this week. The China purchase of Soybean Oil came on the heels of reports from Asian traders that China bought up to 200,000 Mt. of South American soyoil this season. Volume was heavy with an estimated 116,318 Soybeans, 53,894 Soybean Oil and 47,310 Meal traded. Funds were buyers of an estimated 5,000 Soybeans, 3,000 Oil and 2,000 Meal. 

Today's early opening calls are lower. Outside market influences will be important today traders say. With Crude Oil down $2.00, Gold down $30.00, Silver down 82 cents and the US Dollar up 52 the commodity markets are subject to Liquidation. Discussions of an overall risk reduction in all markets given the high prices of commodities have been hitting newswires. Good crop weather in South American Soybean growing areas are somewhat bearish as well. In October China imported 2.85 Mil MT of Soybeans, a rise of 26.9% over last year. Imports in October rose 51.1% from September as lower duties encouraged more imports despite higher freight costs. The Commitment of Traders report released Friday show Funds long 145,685 up 9579, Oil long 65,940 up 2,994, Meal long 72,317 up 4068. Index funds are long 173,868 up 2,200. Overnight Chinese Soybean, Meal and Oil futures closed higher. Malaysian Palm futures lower. 

Early Opening Calls: 8 to 10c lower; Soymeal $3 lower; Soyoil 25 lower

Top News

-- Dalian May Soybean futures 22 yuan/mt higher at 4513 yuan/mt; Soymeal May futures 41 yuan/mt higher at 3408 yuan/mt with 900k; Soyoil futures +30 yuan/mt to 9404 yuan basis the May contract

-- Malaysian Palm Jan futures settled 71 ringgit lower to 2919 ringgit as early Nov export data weaker than expected

-- eCBOT Soybean Vol. 25,401; Pit Vol. 24,316; Open Interest Change: +2,435

-- Weather: 6-10 Day Forecast: Normal to Below Temps. Normal to Below Precip. The Corn Belt will see scattered showers and thunderstorms today and Tuesday.

-- Outside markets. Energy: lower $1.43 at $94.91/bbl, products lower; Dec Gold sharply lower off $25 & Silver: off 64c to $14.90; US $ sharply higher vs Euro, sharply lower vs Yen.

Cash Markets

--CIF Soybeans off 1 to 4. Nov. +25 to +33, Dec. +45 to +48, Jan. +50 to +55, Feb. +38 to +42, Mar. +38 to +41, Apr. +35 to +42, May +35 to +42, J/J +35 to +42.

Nathan T. Smith III

Linn Group

nsmith@linngroup.com

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