July soybeans were trading 11 1/4 cents higher late in the overnight session. China futures closed down 0.3% overnight and down for the 5th session in a row. Palm oil futures in Malaysia closed up 0.3% recovering from the 3.9% break the previous session. While mainland China investors overnight were partially cheered by a Chinese attempt to stimulate domestic consumption through subsidies for energy saving appliances, Hong Kong shares actually remained off balance because of residual fears flowing from the Euro zone. European equity markets were weaker to start today, as increased yields for Spanish debt rose and that kept anxiety up on Euro zone debt issues. Early action in the US equity markets were hinting at the potential for a positive US opening as some investors were comforted by a positive spin from the latest US Fed dialogue. However, the US economic condition was slightly improved yesterday by scheduled data flows and with general expectations for a decline in claims and minimal gains in US Leaders and the Philly Fed survey later this morning, there could be less US slowing fears in the trade today. The market saw follow-through buying to push higher overnight led by less macro economic concerns and ideas that the recent sharp break was overdone. China plans to offer 600,000 tonnes of soybeans from state reserves next week which could help to slow the short-term import demand. Traders believe the country could sell near 2.5 million tonnes over the near-term. Continued strong gains in meal prices have helped hold US crush margins high and this suggests strong demand to increase the US crush pace. This, along with the sharp break in palm oil over the past several weeks has helped to pressure soybean oil. The push to produce more meal could result in higher than needed oil production. July soybeans opened 10 lower and closed 9 cents higher on the session yesterday. A surge higher in wheat and strong gains in old crop corn helped turn the market from negative to positive. The sharp break in the China stock market and fears of continued economic issues in the eurozone due to Greek politics helped to spark continued long liquidation selling early. Bull spreads were also active and November soybeans rallied 20 cents from the overnight lows but still closed lower on the day. From a low of +84 3/4 cents on May 11th, the July/Nov spread closed at +1.19 3/4 July. The surge in meal helped to pressure the soybean oil market. 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. For the weekly export sales report this morning, traders see sales near 1.2 million tonnes as compared with 1.827 million last week.