March soybeans were trading up 3 3/4 cents late in the overnight session. China futures closed up 0.4% overnight and palm oil futures in Malaysia were up 1.2%. Asian equity markets were mixed overnight but the Nikkei managed to forge a surprise recovery in the wake of additional Japanese government support. European equity markets were also mixed, but the markets initially saw pressure off the credit ratings news flow from Moody's. Early US stock market action was initially weaker, but the markets seemed to claw back into positive ground in the wake of positive results from an Italian debt auction. The markets also saw some positive results from a German ZEW survey and that news was given added importance by suggestions from the ZEW, that recent slowing in the German economy was probably temporary. In the US trade today, the markets will be presented with a US retail sales report, with expectations calling for a modest expansion. The US will also release a private small business index survey, Manufacturing Inventories as well as Import & Export prices. There will also be two Fed speeches and US Treasury Secretary testimony to a Senate committee on the recently released 2013 US Budget. Increasing concerns for losing more soybean production in Rio Grande do Sul and southern Parana in Brazil to hot and dry conditions into the weekend helped to support the upside break-out in soybeans this week. While supply is tightening, China was also an active buyer last week and traders believe China may sign contracts to import large quantities of US soybeans later this week. The China delegation last year presented contracts for more than 11 million tonnes. While there is much talk of China demand, the China National Grains and Oils Information center indicated that China's auction for 300,000 tonnes of reserve soybeans this morning failed to attract buyers. Traders indicate that port supply in China is already historically high at 7.15 million tonnes. March soybeans saw strong gains early in the session yesterday and after giving back a good part of the early gains into late in the session, fund buyers emerged late in the day to drive the market to new highs into the close to close sharply higher on the day. The rally pushed the market to the highest level since October 28th. Private exporters reported to the USDA a sale of 120,000 tonnes of soybeans to unknown destination for the 2012/13 season. Weekly export inspections came in at 38.6 million bushels which was right in line with expectations. Export shipments need to average just 16.4 million bushels per week for the rest of the 2011/12 season to reach the projection. Shipments have reached 62.3% of the USDA forecast for the season as compared with 65% as the 5-year average for this time of the year. The USDA baseline outlook for the 2012 season shows total planted area at 74 million acres from 75 million this season. Ending stocks for the 2012/13 season would come in at 209 million bushels as compared with 275 million for this season and this assumes a record yield of 44 bushels per acre. This is not surveyed data but just the initial best-guess estimates from the USDA put together in November as part of the budget process. On February 23-24th, the USDA Outlook conference will give more up-to-date readings for the new crop supply/demand outlook and traders see the smaller South American crop prompting the USDA to raise US exports and tighten the ending stocks outlook further. For the January NOPA crush report for release ahead of the opening, traders see the crush near 143.3 million bushels as compared with 145.4 million in December at 144.6 million last year.