March soybeans were up 7 1/2 cents late in the overnight session. Malaysia palm oil futures were up 0.5% to a new 3-year high. China futures were up 1.6%, and outside market forces looked quiet. Traders were awaiting the USDA supply/demand update for release ahead of the opening. New highs for palm oil overnight, news that China soybean futures were strong coming back from holiday, and the jump in wheat futures helped support the market overnight. The positive tilt to grains coupled with food security concerns continue to provide underlying support, but this has been offset recently by improving supply news from South America. Heavy rains this week in Argentina have eased any dryness concerns for now, even though there is a mostly dry forecast ahead. Brazilian officials pegged the soybean crop at a record 70.1 million tonnes, up from their January forecast of 68.55 million. A late rally in meal following an earlyier break to its lowest level since February 1st helped to support a strong close in the soybean complex yesterday. November soybeans pushed higher yesterday, as traders saw the need for soybeans to compete with other crops expanded planted area in the coming season. November soybeans posted a new high for the move overnight. A potential slowdown in the Chinese economy due to an interest rate hike was seen as a negative factor, especially for markets like soybeans, where China is the major importer on the world market. Talk of the overbought condition of the market, talk of higher/record Brazilian production for the upcoming harvest and talk of the hefty net long position of fund traders were all factors which led to the long liquidation selling following China's news. Traders see higher exports as a reason to suspect lower ending stocks in the supply/demand update for this morning, with many traders looking for a decline of 5-10 million bushels from 140 million posted last month. Gulf basis levels were steady to higher with slow river movement and firm export tone helping to support. The late rally pulled March soybeans up near 20 cents from the day's lows to close near the day's highs.