March soybeans were trading down 9 3/4 cents lower late in the overnight session. China futures closed up 0.2% overnight, and Malaysian palm oil futures closed down 0.9%. Equity markets in Asia were lower overnight, with European stocks initially opening higher but mostly marking time ahead of the Italian debt auction results. The US equity markets also showed initial positive action, but the trade wasn't giving off a definitive direction. The longer term Italian debt auction went off with yields coming in just below the supposedly unsustainable 7% level. In other developments overnight, Greek inflation was down from the prior readings but was still at levels that might be considered unsustainable by some. The US Dollar was marginally stronger against most of the major currencies, which was somewhat surprising considering the acceptable Italian auction results. The scheduled data flow from the US today includes initial and ongoing claims, pending homes sales and a couple of US regional economic reports. Weakness in metals is partially offset by a firm trade in energy markets. The weather models yesterday failed to intensify, and some traders are reading a little higher rain amounts for southern Brazil and Argentina on January 9th as a negative development. This is a long way out on the forecast, and traders are not too confident at this stage. A mostly dry outlook for another 10 days plus some heat in the 6-10 day forecast for Argentina has traders nervous over lost production. Traders are concerned over double-cropped soybean plantings due to the dry conditions. On top of South American weather, too much rain is still an issue for Malaysia, and production shortfalls for palm oil could continue into January. March soybeans saw choppy and two-sided trade and closed lower yesterday for the first time in the last nine trading sessions. The market saw a minor correction to the downside early, as the South America forecast did not show much in the way of changes from Tuesday and talk of the overbought condition sparked some light profit-taking. A sharp break in gold and weakness in energy markets plus a turn down in the US stock market and a turn up in the US dollar were all seen as negative forces to absorb. Traders see very little rain in the forecast for the next 10 days or so for Argentina with temperatures on the rise. Brazil could see some rain relief into the weekend, but southern Brazil rainfall for December is still expected to be well below normal in key growing areas. Central and northern Brazil rains look to remain ample. The market posted highs for the day into the mid-session but sold off late to close slightly lower. Argentina bio-diesel exports for 2011 reached 1.6 million tonnes, up 18.5% from last year. US biodiesel production looks to drop off with the subsidy gone at the end of the month, and traders see ample supply through at least February as end users stored up product produced in the past few months into the deadline. Eggs set into incubators last week were down 5.25% from last year which is a negative factor for meal demand into February/March. Placements were down 3%.