November soybeans were trading up slightly near 7:30 cst this morning. China soybean futures were down 2.5% overnight and Malaysia palm oil prices tumbled on profit taking. Hong Kong equity markets were sharply lower overnight and fell to the lowest levels in a month, but the mainland Chinese market managed a modest rise on the most active volume in more than a month. European equity markets were also weaker to start today, as investors there were disappointed with the lack of easing prospects from the US Fed on Wednesday afternoon. In fact, many global equity markets were weaker overnight off the idea that the US Fed would need to see even more weakness before taking action. In short, the world is mostly anticipating further slowing evidence ahead and that might assist the trade in discounting a minor decline in US claims data later this morning. In fact, with an expected decline in US Import prices to be released today, it is possible that minor improvement in the claims data will be mostly countervailed. There will also be a Fed Budget statement later in the session but the trade isn't expecting much of a surprise from that report. There were no deliveries in soybeans overnight. There were also no meal deliveries but oil deliveries were reported at 462 contracts to bring the total this month to 14,410. The technical action was very negative yesterday and the bearish reaction to bullish USDA news is also seen as a potential sign of a near-term top. Talk that other drought/heat years topped out in early July may have added to the negative tone. However, other years were not like this year and many traders see the potential for further trouble ahead if it does not begin raining soon in the western Corn Belt. The forecast looks threatening with below normal rainfall into the weekend and early next week and while some models try to bring in some rain, other models show a return to a hot and dry scenario with mid-90's and even 100's returning to the western Corn Belt. Technical traders see the sweeping key reversal from a contract high as a negative technical development but soybeans were unable to push through yesterday's lows overnight providing support to bulls. The trade viewed yesterday's report as bullish but the spillover pressure from corn yesterday prompted profit taking for speculators holding long positions. The most recent Commitments of Traders report shows Non-Commercial Speculative Traders holding futures and options were long 255,339 contracts, which is just under the maximum length held at 259,763 on May 1st, 2012. Following the USDA's cut in the new crop soybean yield to 40.5 bushels/acre, the trade is now looking ahead at potential problems if further yield stress is seen on the soybean crop. Export sales for soybeans are running ahead of the pace for old crop and new crop to reach the USDA projections and there is simply no room in the balance sheet to accommodate any further yield loss given the lack of supply from South America. Producers are not selling and end users are likely to be active buyers on further weakness.