July soybeans were trading 32 1/2 cents higher near 7:30 cst. China futures closed 1.4% higher overnight while Malaysia palm oil prices were up 1.7%. Asian stocks were weaker overnight and that action was seen well in advance of a discouraging economic survey from Germany that applied fresh pressure to European equities. European equities did fall off the softer than expected German ZEW readings released this morning, but the markets in Europe were already a bit soft because of rising borrowing costs for various EU trouble spot countries. Somewhat surprising is the fact that US stocks were holding in positive ground into the German ZEW results and they showed very little reaction to the weak data. Apparently the US markets are beginning to look forward to the FOMC meeting results on Wednesday afternoon, which many think will bring on an extension of the operation twist program. Therefore the markets will take a long look at US housing starts and permits data, which are expected to come in minimally higher and for some, that might temper the prospect of definitive US Fed action on Wednesday. November soybeans pushed to the highest level since May 2nd overnight as a hot and dry outlook for the Midwest plus deteriorating crop conditions helped to support. The weekly Soybeans Conditions report showed that just 56% of the crop was rated good/excellent compared to 60% last week and 68% last year. The 10 year average for this time of year is 66%. The lowest rating on record was 26% in 1988. Other poor rated crops at this time of the year included a 53% rating in 1992 and 55% ratings for 1993 and 1989. Illinois was rated 47% good to excellent, down 3% from last week and down from 64% last year and 59% as the 20-year average. Most of Illinois, Indiana and Ohio may not see more than a trace to less than 1/4 inch for the next five days and the 6-10 day turns very dry. There is a chance for some cooler weather and decent rain amounts in the 11-15 day on some models but the market is nervous over the crop outlook going into July. November soybeans closed sharply higher yesterday as the prospect of warmer and drier weather over the next 7-10 days offered support to the new crop contract. The drier than normal forecast could raise doubts as to how much double crop soybeans are planted. Weekly export inspections came in at just 7.9 million bushels which was well below trade expectations. Traders noted liquidation in the July/November spread as their focus shifted towards potential yield loss for new crop beans.