Jan Soybeans closed into new contract highs on Tuesday as brisk export demand, especially from China spurred the market higher. Jan beans gained 10 cents in heavy trading despite sharply lower crude oil prices. On Tuesday, the U.S. Agriculture Department reported the sale of 107,000 mt. of U.S. soybeans to China. A break in crude oil caused oil share to lean back to Meal as Soybean oil closed down 23 and Meal gained $ 4.90. Traders said soybean futures were also supported by drier than normal weather in north-eastern Brazil, the world's No. 2 producer and exporter of soybeans after the United States. Funds bought an estimated 5,000 Soybeans, sold 1,500 Oil and 1,00 meal. Volume was moderate to heavy, Soybeans traded 118,272, Meal 55,882 and Oil 61,767 contracts. Funds bought an estimated 5,000 Soybean contracts, 3,000 meal and sold 3, 000 Oil.

Early calls are higher. Today the NOPA crush was released showing Soy crush at 134.974 mil. bu, below the average trade estimate for 156.2 mil. bu. NOPA reported US soyoil stocks at 2.68 lbs. up from 2.561 bil in Sept. Chinese soybean demand continues to spur the bean market as the overnight market indicates taking Jan beans into new contract highs and making new highs not seen since 2004. Traders say China has booked at least three to four cargoes of soybeans for Dec/Jan shipment since late last week. Britain's farm ministry on Wednesday said it would cull poultry at four sites as precautionary measures. The ministry confirmed deadly bird flu was found at a poultry farm in Eastern England. The Baltic Freight index posted a record high on Tuesday as raw material demand in Asia continues to surge. Overnight Chinese Soybeans closed higher. Malaysian Palm oil futures closed higher. 

Early Opening Calls: higher

Top News

*USDA reports private sale of 44,300 mt of US Soyoil to Unknown for 2007/08

**Oct NOPA Soybean Crush: 154.974 mln bu.; expected Oct: 156.2 mln; Sept 139.829

**Oct NOPA Soybean Meal Exports: 562,420 mt

**Oct NOPA Soybean Oil Stocks: 2.680 bln lbs

-- Latest USDA data shows 97% of the Soybean crop has been harvested up 5% points from prior week & ahead of last year & 5 yr average pace of 94% complete.

-- Private analyst Informa: 2008 Soybean acreage pegged at 68.1 mil acres, -3.0 mil acres less than previous estimates, 4.4 mil acres more than '07

-- Private analyst Informa: 2008 Cotton acreage pegged at 10.0 mil acres, +0.6 mil acres more than previous estimates, -0.85 mil acres less than '07

-- German oilseed trade group sees no further biodiesel production expansion in the country, due to unfavorable tax legislation - further tax increase on biodiesel producers expected to pass by the end of the year

-- EPA researchers looking at the possibility of E12 and E15 blending in gasoline

-- Tuesday's USDA Soybeans Export Inspections: 24.927 mln mt; expected 26.0 mln mt

-- Tuesday's USDA Corn Export Inspections: 53.249 mln mt; expected 47.5 mln mt

-- Tuesday's USDA Wheat Export Inspections: 23.138 mln mt; expected 30.5 mln mt

-- CBOT Soybean Deliveries: 358 contracts.

-- Dalian Soybean futures higher 40 yuan/mt; soymeal up 63 yuan/mt & soyoil sharply higher 154 yuan/mt higher as petroleum futures rebound.

-- Malaysian Palm Jan futures 11 ringgit lower, at 2913 ringgit/mt.

-- eCBOT Soybean Vol. 86,557; Pit Vol. 26,458; Open Interest Change: +1,826

-- Weather: 6-10 Day Forecast: Below Normal Temps. Normal to Below Precip. The Corn Belt looks dry today into Saturday.

-- Outside markets. Energy: crude up 1.30 at $92.47/bbl, products up too; Gold & Silver both shoot higher up $17/oz & 44c/oz respectively; US $ lower vs Euro, higher vs Yen.

Cash Markets

--CIF Soybeans steady off 5. Nov. +28 to +32, Dec. +45 to +50, Jan. +50 to +55, Feb. +38 to +42, Mar. +36 to +42, Apr. +35 to +42, May +35 to +42, J/J +35 to +42.

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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