January Soybeans ended Tuesdays session lower down 7 cents. Traders say the market is enduring a pullback from its rally to a 34-year high as concerns about crop weather in Argentina are easing somewhat. With the market enjoying a rally into new highs and maintaining its upside bias for the most part it's not unexpected to see the market pulling back. Volume has stayed strong going into the holidays 161,456 Soybeans, 78,302 Oil and 63,799 meal traded. Funds were on the sell side on Tuesday selling and estimated 5,000 Soybeans, 2,000 Meal and even in Oil.
Early Opening Calls are higher. The USDA confirmed that exporters sold 120,000 mt. of U.S. soybeans to an unknown buyer for 2007/08 delivery. Traders will continue to monitor crop weather in Argentina, where rain was expected this weekend but forecasters took some moisture out of outlooks for early next week. Traders are expecting the unexpected during this holiday period as volumes tend to drop and markets can take an unusual turn on lighter volume. 3 week floods in Malaysia are causing wet weather concerns and the market is higher by 1.1% on production concerns. Overnight Chinese Soybeans, Meal and Oil are lower.
Early Opening Calls: 3-5c better, meal .50 to 1.00 higher and oil .10 to .15 higher.
Top News
-- USDA reports private sale of 120,000 mt of US Soybeans sold to Unknown destination for 07/08
-- To encourage more hog production Chinese officials are looking at subsidies to farmers. Proposals include money earmarked to help farmers improve hog farm structures, money for vaccinations against various diseases & subsidies to encourage keeping sows in breeding stocks.
-- Without giving specific conditions under which exports could be banned, the Russian gov't Tuesday listed specific commodities which would be subject to emergency export bans. Wheat, barley, rye & related mill products along with oilseed & oilseed products were listed among products that could be banned for export under emergency conditions when the gov't deems appropriate.
-- Dalian Soybean futures were mostly lower, May off 9, while active Sept off -3 to 4443 yuan/mt. Sept soymeal futures traded over 1.22 mln contracts and settled 25 lower to 3,303 yuan/mt; Soyoil held firm up 50 to 9,722 yuan/mt basis the May futures
-- Malaysian Palm futures rose in overnight trading on output concerns as key planting regions experience monsoon conditions making it difficult to get raw materials from plantations to mills.
-- eCBOT Soybean Vol. 118,535; Pit Vol. 34,428; Open Interest Change: -5,151
-- Weather: 6-10 Day Forecast: Above Normal Temps. Normal to Above Precip. The Corn Belt will be dry today into Friday. Saturday will see some showers and snow. Sunday looks dry. Temps normal to above.
-- Outside markets: Energy complex +.27 at $90.35; Gold & Silver -2.0 at $801 & steady at $14; US $ down slightly vs. Yen and up slightly vs. Euro
Cash Markets
-- CIF Soybeans steady. LH Dec. +30 to +??, Jan. +40 to +45, Feb. +30 to +38, Mar. +34 to +40, Apr. +30 to +35, May +34 to +40, J/J +38 to +40.
Nate Smith
SMS Brokerage
nsmith@jerrygulke.com
toll free: (877) 787-6278
local: (312) 896-2090
fax: (312) 896-2050
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