Soybeans closed slightly higher on Thursday but significantly off their highs. Traders say the market was pressured by disappointing export sales and prospects for increased U.S. Soybean acres. Support stemmed from a continuation of the Argentine situation and support from higher corn prices. Volume was low again yesterday in the Soy complex soybeans traded 85,711, Meal 36,427 and oil 46,530. Funds were buyers of an estimated 1,000 Soybeans, 1,000 Meal and 2,000 Oil.

Early opening calls, sharply higher. Today the USDA released their May Supply/Demand report. The report shows Soybean ending stocks of 185 mil. bu. well below analysts average estimate of 270 mil bu. The report is being viewed as very friendly to the market by traders and analysts. More importantly, wet cool weather which has been delaying corn planting is starting to spill over into problems with bean planting farmers say. Talk of continued planting of corn in questionable ground and now talk of delayed bean plantings due to poor weather conditions. 6 to 10 day weather forecasts call for rain and cool temps. Also supportive is the continuation of the Argentine farmer strike. Farmers officially launched an eight day strike yesterday breaking off talks. Exports are completely shut down out of Argentina however Farmers have not set up road blocks. Malaysian Palm futures closed higher overnight supported by surging crude oil prices. A weaker dollar and higher crude oil prices are being viewed as supportive to the Soy complex today. Overnight Chinese Soybean and meal closed higher overnight, Oil lower.

Top News

-- US Sec. of Ag Schafer says proposed farm bill legislation has too much spending & doesn't adequately reform subsidies to farmers & Pres. Bush will likely veto the bill in its current form.

-- Dalian Soybean futures for Jan delivery were 20 yuan higher at 4,222 yuan/mt; Sept Soymeal rose 4 yuan to 3,441 yuan/mt, however Sept Soyoil futures were lower on the session down 20 at 10,810 yuan/mt

-- CBOT May Soybean Delivery: NONE

-- CBOT May Soybean Oil Delivery: 426

-- CBOT May Soybean Meal Delivery: 409

-- July Malasysian palm oil futures were slightly higher, up 1 ringgit at 3,458 ringgit/mt

-- Globex Soybean Vol. 65,816; Pit Vol. 14,536; Open Interest Change: - 6,611

-- Weather: 6-10 Day Forecast: Below Normal Temps. Normal to Above Precip. The western Corn Belt will see some showers and thunderstorms today. Saturday is mostly dry. Sunday will see showers and thunderstorms west to east. Dry Monday. Temps below normal.

-- Outside markets: Energy Complex +1.99 at $125.68; Gold & Silver: +4.1 at $886.0 & +0.137 at $16.933; US $ is slightly lower vs. Euro & is trading lower vs. Yen.

Cash Markets

-- CIF Soybeans steady firm. May +13 to +??, June +25 to +30, July +30 to +38, Sept. +18 to +25, Oct. +16 to +24, Nov. +22 to +29

Nate Smith

Linn Group

nsmith@linngroup.com

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