January soybeans were down 6 1/4 cents late in the overnight session. China futures closed 0.3% lower on the session and Palm oil futures in Malaysia were down 0.9%. Equity markets in Asia were mixed overnight but lower in Europe. Early indications are that US equity markets will open lower. The US Dollar is moderately stronger against most of the major currencies this morning. A major credit ratings agency warned yesterday that US banks could see a downgrade due to their exposure to European markets. UK Retail Sales during October were up 0.6%, higher than market expectations. Major US economic numbers to be released this morning include Weekly Jobless Claims and October Housing Starts at 7:30 AM, and the Philly Fed manufacturing survey at 9:00 AM. Weakness in metals and energy markets adds to the negative tone to start the day. A bearish tilt to outside markets yesterday and again overnight helped to pressure the market with the US dollar pushing to a 6-week high and traders nervous over the European debt situation and its impact on the global economy. There was news from the Chinese government that they will stockpile soybeans around 4,000 yuan, which was lower than China producers were hoping for but higher than the current imported price. This suggests that China may have significant buying interest near current international price levels. China traders believe imports this year will be 58-61 million tonnes, compared with the current USDA estimate at 56.5 million tonnes. The higher estimate makes sense if traders assume that imports will be used to restock state reserves, which traders believe will need to be boosted by about 3 million tonnes. January soybeans closed sharply lower on the session yesterday but managed to hold onto some of the strong gains from earlier this week. The lack of confirmation from China on recent purchases plus jittery financial markets helped to keep buyers on the sidelines, and when the surge higher in crude oil only provided some brief support, long liquidation selling emerged to pressure the market late in the day. China is thought to have bought near 500,000 tonnes of US soybeans to restock state reserves. January meal closed sharply lower on the session and moved to the lowest level since November of 2010. January soybeans jumped as much as 38 1/4 cents off of Friday's low into Tuesday's highs. Good weather for planting and for the early growing period in South America is seen as a negative force. In the tender for 40,000-60,000 tonnes of US or South America soybeans, Taiwan bought 55,000 tonnes from Brazil.