For the second day in a row soybeans ended up the limit (50 cents). Traders say the rebound from last weeks fund driven sell off was due and that the break in prices was overdone. Dollar weakness and the lingering farmer strike in Argentina which is shifting export business back to the US is supportive. Option volatility is extremely high at 56% for at the money calls which is historically high showing just how volatile the soybean market is. Volume on Tuesday was light with soybeans trading 103,575, 49,369 meal and 49,369 Oil. Funds bought an estimated 4,000 Soybeans, 2,000 Meal and 3,000 Oil

Early opening calls sharply higher. Argentine major farm groups say they will continue their nationwide strike indefinitely. The strike is beginning to have a major effect with reports of bare store shelves and an interruption of shipments to China of approximately 1 mmt of beans is being rumored. This strike is forcing business back to the US and causing prices to rise overall. Brazil bean harvest has moved to 46 pct complete. Northern areas are as much as 85 pct complete. Brazil bean basis weakening some from the highs late last week. Overnight Chinese Soybean, Meal and Oil futures closed higher. Palm oil closed higher up 2%.

Trend: The bean market reacting to Argentina and tightening old crop supplies. Not sure there is a reason for the rally in new crop and that goes a long way to explaining why the spread are gaining so much.

Early Opening Calls: 40 to 45 cents higher, Meal $ 2.00 to $3.00 higher, Oil $1.00 to $1.20 higher.

Top News -- European based vegoil industy analyst group, Oil World, suggest current prices of vegoils makes them competitive for biofuel against petroleum & sees vegoil prices rising again on better demand & tight vegoil stocks -- Head of Malaysian based palm oil producer said prices for 2008 for the vegoil should remain around 3,400 ringgit/mt ($1,064) -- Farm group in Argentina say they plan to continue striking indefinitely over gov't taxes, & despite firms recently declaring force majure & choosing alternate outgoing ports to continue to meet their contracts. -- In continuing effort to stabilize domestic prices, China's gov't State Council announced plans to raise grain minimum purchase prices & lift agricultural subsidies to domestic producers to ensure grain supplies. -- French port workers strike to protest the gov't proposal to privatise 7 of 9 public ports. -- CFTC approved new daily price limits to begin March 28, 2008, for CME Group corn, mini-sized corn, soybeans, mini-sized soybeans and soybean oil futures and options on futures contracts. Corn price limits will be increased to $0.30 from $0.20 per bushel, soybeans to $0.70 from $0.50 per bushel and soybean oil to $0.025 from $0.020 per pound. In addition, daily price limits for wheat, mini-sized wheat, corn, mini-sized corn, soybeans, mini-sized soybeans, soybean meal, soybean oil, oats and rough rice futures can expand twice, by approximately 50 percent each time, when market conditions dictate that an expansion is warranted. -- Mississippi River lock & dam #25 repairs scheduled to begin Mar 31 will stop north & south bound barge traffic for up to 8 days, acc. to US Army Corp of Engineers. The lock & dam is 60 miles north of St Louis. -- CME Group announced it will offer electronically traded options on futures contracts in Corn, Soybeans, Soymeal, Soyoil, Wheat, Oats, & Rough Rice side by side during during day-time open outcry trading hours beginning April 14, 2008. -- CFTC industry roundtable scheduled for Apr 22 to discuss recent events concerning Agricultural markets. -- Dalian Sept Soybean futures close 80 yuan higher at 4,972. Sept Soymeal futures followed higher up 47 to 3,329 yuan/mt; Sept Soyoil futures had strong gains rising 182 yuan to 11,074 yuan/mt ($1=7.03 yuan) -- June Malaysia palm oil futures rose $62.56/mt in overnight trade to close overnight trading at $1,157.50/mt. Traders suggest the 2 week high made on Wednesday show fundamentals like tight vegoil stocks, labor strife in Argentina are occupying the minds of market players. -- Globex Soybean Vol. 85,726; Pit Vol. 11,404; Open Interest Change: +3,011 -- Weather: 6-10 Day Forecast: Normal to Above Temps. Normal to below Precip. The Corn Belt will see some light precip today favoring the east. Thursday will see rains favoring the south. Friday and Saturday look mostly dry. Rain returns Sunday. Temps normal to below. -- Outside markets: Energy Complex +1.01 at $102.21; Gold & Silver: +9.9 at $944.9 & +0.246 at $18.058; US $ is lower vs. Euro & Yen

Cash Markets -- CIF Soybeans steady up 3 . Mar. +32 to +??, Apr. +21 to +28, May +27 to +35, June +20 to +28, July +23 to +25, Sept. +3 to +15, Oct. +7 to +12, Nov. +14 to +25

Nate Smith SMS Brokerage nsmith@jerrygulke.com toll free: (877) 787-6278 local: (312) 896-2090 fax: (312) 896-2052

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