Soybeans surged higher in the post holiday trade ending up 40 cents higher in the March contract. At one point they were flirting with a limit move as the March contract was up 46 ¾ cents just 3 ¾ cents off limit. Traders say the rally started with talk that forecast for rain in Argentina in the coming week will be less than expected despite good rain over the weekend. With weather in that region getting hotter they say more moisture will be needed to prevent deterioration. Holiday type trade kept volumes on the light side with the CBOT reporting 133,649 Soybeans, 56,066 Soybean Oil and 50,689 Meal trading on Wednesday. Funds however bought an estimated 5,500 Soybeans , 4,500 Oil and 3,500 Meal.

Early Opening calls are lower. Today's top news Story is out of Pakistan where reports of a suicide bomber killing former Pakistani prime minister Benazir Bhutto. This has crude oil markets rallying in response to potential unrest again in the Middle East. Traders say this could influence the Veg Oil markets. Talk out of China is that the Government will release 100,000mt. to 150,000 mt. of Soyoil in Jan. Beijing, which bought approximately 500,000 mil mt. of Soyoil last month will release some of the reserves to the market when cargoes arrive in early January. Overnight South Korea issued a tender for 25,000 mt. of Non GMO Soybeans for delivery in Feb. Traders say dry weather in Argentina was beginning to threaten soybean output after monsoon floods had battered palm plantations in Malaysia. Overnight Malaysian Palm Oil futures were sharply higher into new highs. So far Palm Oil is up 55% this year. Chinese Soybeans, Meal and Oil up overnight.

Early Opening calls Soybeans 1 to 2 cents lower, Meal $1.00 to $2.00 Higher, Oil .20 to .30 lower.

Top News

USDA Export Sales: Weekly USDA export sales data, normally released on Thursdays, will be

released on Friday, Dec 28th at 7:30 AM CST

**Wednesday's USDA Weekly Soybean Inspections: 25.838 mln bu; expected 29.5 mln bu; prior 37.801 mln

-- 25,000 mt of Non GMO Soybeans sought in tender by state S Korean gov't fisheries in tender

Thursday. Delivery is set for Feb 25th

-- China's head economist forecasts 2008 GDP slightly lower than the 11.5% estimated growth

seen in 2007 & calls for easier consumer price inflation during 2008 also.

-- Dalian Sept Soybean futures rose 70 yuan to 4694 yuan/mt in overnight trade on the Dalian exchange; Soymeal futures for Sept delivery rose 22 to settle at 3,400 yuan/mt; Soyoil futures were 160 yuan higher

-- Malaysian palm oil futures rose $5/mt in overnight trade to settle at $929/mt, it made an intraday high at $945/mt

-- eCBOT Soybean Vol. 97,519; Pit Vol. 30,196; Open Interest Change: +561

-- Weather: The Corn Belt looks dry today. Friday will see showers and snow. Dry Saturday and Sunday. Rain and snow again Monday. Temps normal to above.

-- Outside markets: Energy complex +.23 at $96.20 ; Gold & Silver -.20 at $825.3 & +.036 at $14.87; US $ is higher vs. Yen & lower vs. Euro

Cash Markets

--CIF Soybeans steady off 3. LH Dec. +33 to +??, Jan. +35 to +42, Feb. +30 to +40, Mar. +33 to +40, Apr. +27 to +33,

May +32 to +40, J/J +35 to +40.

Nate Smith

SMS Brokerage

nsmith@jerrygulke.com

toll free: (877) 787-6278

local: (312) 896-2090

fax: (312) 896-2052

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