July soybeans were trading 32 1/2 cents higher near 7:30 cst with November up 42 1/2 cents. China futures closed 1.9% higher overnight while Malaysia palm oil prices were up 2.6% overnight after gaining near 4% last week. Chinese equities were weaker overnight with some measures posting the biggest declines of the last month. European equities were also weaker this morning, with investors apparently not anticipating anything constructive or definitive from the coming EU summit. The US scheduled report slate today contains a Chicago Fed National Activity Index, New Home sales and a Texas manufacturing survey, with the new home sales release potentially the most significant US report due out today. At least in the early action it would appear that risk-off sentiment has started the week with an edge over the risk-on crowd. Weather supports the grain markets. The short-term and 2 week outlook for the Midwest turned hotter and drier over the weekend and this sparked a gap higher opening for November soybeans through the old April highs. This is positive technical action. Weekend rains were very sparse for areas east of the Mississippi. Tom Skilling, a Chicago weatherman, sees 101 temperatures in Chicago on Thursday with mid-90's for Wednesday and Friday. The heat stays in the plains and western Corn Belt for much of the next two weeks and areas in central and southern Iowa, Missouri, the southern 2/3rds of Illinois and central and southern Indiana look mostly dry. Traders see another drop in condition ratings this week of 2-4% and there are growing concerns for the yield outlook if the northern delta and southern Midwest stay mostly dry and hot. Traders see tightening old crop ending stocks and a very tight initial view for the 2012/13 season and this assumed near record yield. Strong basis levels in South America last week suggests that available surplus grain for export is getting much tighter and that new soybean and meal business is likely to shift to the US. November soybeans closed slightly higher on the session Friday but well off session highs. Argentina officials cut soybean production to 40.3 million tonnes vs. the USDA estimate of 41.5 million tonnes. The Commitments of Traders reports as of June 19th for Soybeans showed Non-Commercial traders were net long 217,267 contracts, an increase of 5,131 contracts for the week. Non-Commercial and Nonreportable combined traders held a net long of 197,982 contracts, up 9,667 contracts for the week and the buying trend is seen as a short-term positive force. For Soybean Meal, Non-Commercial traders were net long 89,533 contracts, an increase of 8,720 contracts for the week and the strong buying trend from funds is seen as a positive force. Non-Commercial and Nonreportable combined traders held a net long position of 110,823 contracts, up 7,925. For Soybean Oil, Non-Commercial traders were net short 35,872 contracts, a decrease of 3,739 contracts for the week and the short-covering is seen as a short-term positive force. Non-Commercial and Nonreportable combined traders held a net short of 36,503 contracts, down 7,890 for the week. Commodity Index traders held a net long of 80,969 contracts, down 3,807.