Soybeans Closed strong again on Wednesday up 45 cents in May. The market opened up limit and broke in early trading and tried to go back to limit late in the day but were unable. Traders say the Argentine Farmers strike has been having an effect on Soybean prices worldwide pushing demand back to the US. Overall weakness in the US$ is also supportive. Volume on Wednesday was high trading 191,634 Soybeans, 90,384 Soybean oil and 78,220 Meal. Funds bought an estimated 4,000 Soybeans, 2,500 Meal and sold 2,500 Oil.

Early Opening Calls lower. Weekly export sales released today show Soybeans 07/08 Export Sales Net: 369,600 mt; 08/09 Net: 162,700 mt; within analyst expectations of 300-500k mt. Oil sales 42.0 mt; well above analyst expectations of 10.0 mt. to 20.0 mt. and Meal sales of 156.9 mt; slightly above analyst expectations of 100 mt. to 150 mt. Brazil’s Safras Mercado raised their estimate for Brazil Soybean, Meal and Oil exports to 43.9 mmt compared to their last estimate of 43.1 mmt. New Trading limits start tonight. Corn is going from 20 cent per day limit to 30 cents per day, Soybeans go from 50 cent limit to 70 cents and soybean oil go from 200 pt limit to 250. With the increased limits margins will rise as well. Monday the USDA will release their planting intentions report and analysts estimate for Soybean plantings stands at 71.52 mil. acres vs 2007 of 63.63 mil acres. Overnight Chinese Soybeans, Meal and Oil closed loser. Malaysian Palm oil closed lower overnight.

Trend: The Bean complex still fighting the concern about the Arg. farmer strike and the implications to demand for US beans and products. This created a very volatile day with big moves up and down but managed to close fairly strong for the third day in a row. This may extend the vegoil rally more---that is the chart with the dynamics---means gaps all over the chart! This market did not close particularly well but has a very strong looking island bottom leaving two days trade at strong support levels. Buy this market on weakness---based on your stomach for volatility. Not sure why the meal had such swinging trade but it may also be tied to the Arg export limitations. Basis levels of both US meal and corn have firmed in direct response.

Early Opening calls: Soybeans 5 to 10 lower, Meal .50 to $1.50 lower. Oil .10 to .20 lower.

Report Recap **USDA Soybeans 07/08 Export Sales Net: 369,600 mt; 08/09 Net: 162,700 mt; expected 300-500k mt **USDA Soybean Meal 07/08 Export Sales Net: 156,800 mt; 08/09 Export Sales Net: 22,000 mt; expected 100-125k **USDA Soybean Oil 07/08 Export Sales Net: 42,000 mt; 08/09 Export Sales Net: NONE mt; expected 10-15k

**US Census Feb Soybean Crushing: 146.362 mln bu; expected 146.0 mln bu **US Census Feb Soybean Oil Stocks: 2.681 bln lbs; expected 2.98 bln lbs **US Census Feb Soybean Meal Stocks: 335,781 tons; expected 305,000 tons

Top News -- Linn Group estimates 2008 US Soybean Crop at 73.6 mil acres, an increase of +14.8% from last year. They see acreage coming out of cotton (-14.7%), oats, canola/sunseed. Linn Group sees total US crop acreage at 255.5 mil acres, an increase of just over 5 million from last year. -- Ag analysts collectively expect Monday's USDA Soybean planting intentions to show 71.7 mln acres planted in the upcoming season, up from last year's 63.6 mln acres. -- Soybean qtrly grain stocks as of Mar 1, to be released Monday, are expected by analysts at 1.4 bln bu vs Mar 1 year ago of 1.787 bln bu. -- Brazil's Safras private ag analysis group expects the country's 07/08 soybean crop exports at 27.5 mln mt, up from last year's 26 mln mt or roughly 16% higher. -- Safras estimates Brazil in 2008 will export 43.9 mln mt of Soybeans, Meal & Oil, up from last year's 38.55 mln mt. Meal exports were expected at 14.3 mln mt, slightly lower than their last estimate of 15 mln mt, but above year ago levels by 15%. Soyoil exports in 2008 were expected 10% lower to 2.1 mln mt. Soybean exports forecast at 27.5 mln mt, up from last year's 26 mln mt or roughly 16% higher. -- Farmer strike in Argentina forces Bunge to declare force majeure on exports from that country, but vows to meet obligations as best as it can from other parts of its distribution network. -- Informal talks to reduce soyoil import duties by India was reported earlier this week, but another official says gov't ministers will soon meet to more formally discuss the reductions. -- 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. -- Dalian Soybean futures fell 70 in overnight trade to 4,902 yuan/mt: Soymeal futures fell 32 yuan to 3,297 yuan/mt; Sept soyoil futures settled at 10,930 yuan/mt down 144 from prev day's settlement -- Malaysian palm oil futures settled 60 ringgit lower in overnight trade at 3,640 ringgit/mt ($1=3.20 ringgit) -- Globex Soybean Vol. 160,074; Pit Vol. 27,267; Open Interest Change: -1,289 -- Weather: 6-10 Day Forecast: Above Normal Temps. Normal to Above Precip. The Corn Belt will see light showers ending in the east today. Friday and Saturday look mostly dry. Sunday and Monday will see a return of showers. Temps normal to below. -- Outside markets: Energy Complex -0.15 at $105.75; Gold & Silver: -8.0 at $941.2 & -0.353 at $18.020; US $ is slightly better vs. Euro & Yen

Cash Markets -- CIF Soybeans steady up 3. Mar. +35 to +44, Apr. +20 to +27, May +?? to +30, June +?? to +28, July +?? to +25, Sept. +3 to +15, Oct. +7 to +10, Nov. +12 to +22

Nate Smith Linn Group nsmith@linngroup.com toll free: (877) 787-6278 local: (312) 896-2090 fax: (312) 896-2052

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