July soybeans were trading 19 1/2 cents lower late in the overnight session. China futures closed down 0.5% overnight and down for the 4th session in a row. Palm oil futures in Malaysia closed down 3.9% to a new 3-month low. The Hong Kong market resumed its downward march last night with the largest daily loss in several months. Shares also weakened on mainland China as investors overnight were disappointed by weaker than expected Chinese loan demand figures for May. Not surprisingly, European equity markets were mixed to weaker again with a fairly negative flow of headlines on Greece keeping investors on edge. With reports of many Greeks pulling deposits from banks, that in turn has fanned talk of a Greece exit from the Euro zone. Early action in the US equity markets was mixed and two sided as the hangover from the Euro zone has kept investors nervous. The main feature of the US trade today could be US housing data or it could be the FOMC meeting minutes release later in the day. A sharp drop in metal and energy markets leaves outside forces bearish this morning. The sharp break in the China stock market combined with the record high net long position noted in the last COT report for soybeans and meal leaves the market vulnerable to more long liquidation selling over the near-term. Open interest has not come down much on the break and this has traders nervous of throw-in-the-towel type selling if outside market forces stay negative. The China National Grains and Oils Information Centre sees China soybean production down 7% this year to 13 million tonnes. The group sees 2011/12 imports of soybeans near 58 million tonnes as compared with the USDA estimate of 56 million tonnes. New crop exports are pegged at 60 million vs. USDA at 61 mmt. The selling pushed November soybeans down overnight to push to the lowest level since March 6th. July soybeans closed sharply higher on the session yesterday and near the highs of the day. Rumors that China was still in the market for old crop soybeans helped to spark the late buying. July meal led the whole complex higher late in the day closing $13.70 higher. Outside market forces were mixed and this helped to spark some of the volatile trade. Talk of a six year low in rapeseed production in Europe helped to provide some support but a lack of new export news on the daily wire and a fast start to the planting season helped to limit the advance. The soybean crop is 46% planted from 24% as the 5-year average. With a dry weather outlook for the next week, many traders see a surge in plantings into late May. The excellent weather outlook for planting helped to limit the buying in new crop November soybeans. Egypt bought 6,000 tonnes of optional origin soybean oil and 34,000 tonnes of sunoil overnight. Traders see Australia canola production for the 2012/13 season down 6.9% to 2.97 million tonnes. Last year was a record high.