January soybeans were trading down 1 3/4 cents late in the overnight session. China futures closed down 0.6% overnight and Malaysia palm oil futures were down 1% overnight. While equity markets in Asia were generally lower during overnight trading, stock indices in Europe were generally higher this morning and the US market could open slightly lower. The US Dollar is slightly weaker against most of the major currencies. Japanese Machinery Orders during October were down 6.9%, weaker than expectations. The Bank of England will announce any changes to UK monetary policy at 6:00 AM. The European Central Bank will also announce any changes to Euro zone monetary policy at 6:45 AM. Major US economic numbers to be released this morning include Weekly Jobless Claims at 7:30 AM, and October Wholesale Inventories at 9:00 AM. Meal deliveries this morning were 43 contracts for a total of 722 for the month while oil deliveries were 407 to push cumulative for the month to 9,307 contracts. While outside markets are not moving much overnight, traders remain nervous over the possibility of volatile markets into the end of the week with the EU summit on debt issues and a USDA supply/demand update for Friday morning. Traders are also watching developments in southern Brazil and Argentina closely. Argentina looks to have just one chance of rain in the next few weeks into this weekend and amounts look low. Traders believe it is too early to be concerned with the dry pattern and there is still below normal temperatures but clearly top soil will be drying out and some stress could begin in another week or so. Brazil's Conab (government supply agency) pegged the 2011/12 soybean crop at just 71.29 million tonnes this morning which is down 5.4% from last year and below trade expectations. In the November USDA update, Brazil production was pegged at 75.00 million tonnes from 73.5 million in October. Brazil had a record crop last year of 75.5 million tonnes. January soybeans managed to close higher on the session yesterday despite weakness in corn and a sharp break in wheat. While outside market forces turned negative into the opening with a firm US dollar and weakness in energy and equity markets, soybeans managed to rally with talk of a drier weather forecast for South America helping to support. A drier weather trend for the next ten days with heat near the end of this period has traders seeing stressful conditions for areas of Argentina and southern Brazil which do not get rains in the next week. Traders are looking for 2011/12 soybean ending stocks near 215 million bushels for the USDA report on Friday morning as compared with 195 million bushels from the November report and 160 million from the October report. Cumulative export shipments so far for the marketing year have reached just 428.3 million bushels, down 35.6% (236.7 million bushels) from last year's pace. For the USDA export sales report this morning, traders see soybean sales near 725,000 tonnes, and meal near 100,000 tonnes with only small oil sales. The market continues to see contraction in the broiler industry with eggs set for the week down 4.4% from last year which suggests declining meal demand into the first quarter.