Soybeans traded slightly higher overnight, and the November contract took out yesterday's highs. November soybeans are trading 13 cents higher near 6:30 am CST. Malaysian palm oil exports were down 18.5% at 1.193 million tonnes in July vs. 1.463 in June. Malaysian palm oil futures edged lower overnight. There were no August soybean or soybean meal deliveries. August soybean oil deliveries totaled 3,052. Chinese Shares were weaker overnight, with the Shanghai market remaining weak and Hong Kong shares forging a minor rally. European shares broke a recent pattern of strength, as the promise of additional central bank easing appears to have lost its supportive capacity. The US scheduled report slate today is active with Personal Spending/Income, a private home price survey, Chicago PMI and Consumer Confidence due out. Expectations on the reports are mixed with the early numbers expected to be unchanged to slightly positive and the later data flows expected to be soft. The market will also see the beginning of a 2 day FOMC meeting. A questionable weather forecast for the month of August and tightening US soybean balance sheet continues to force risk premium into the soybean market. The market is becoming increasingly worried about the August weather outlook, with some private forecasters calling for a 16-30 day outlook of above normal heat and below normal rainfall in the heart of the US Corn Belt. Scattered showers are moving across central Kansas, Missouri, Northern Illinois, Southern Michigan, and the southern Delta this morning. Accumulation is light and the rain is expected to shut off for much of the US Midwest following today's storm system. Blistering temperatures will move back into the central and western Midwest by tomorrow and last until the weekend for some areas. Temperatures are expected to reach 90-100 degrees by tomorrow, and heat indexes should exceed 100 degrees for areas west of the Mississippi River. Nearly half of the US soybean crop is not receiving the 0.25 inches of rainfall needed during the important pod-setting stage, and the updated Crop Conditions reports, released yesterday, stated that 55% of the soybean crop is now setting pods. The 5 year average for the same time period is 35%. The warm and dry weather is advancing the soybean crop at a rapid pace, and it is likely that 70-75% of the soybean crop will be setting pods by next Monday. The weekly report also pegged soybeans with good/excellent conditions at 29% compared to 31% last week and 60% last year. The lowest good/excellent rating for this time of year was 24% in 1988. The drop in ratings was in line with expectations. The US soybean poor/very poor ratings increased by 2% to 37%, which exceeds the previous all-time high of 22% for this time of year. Iowa good/excellent ratings declined by 3% to 25%, and Illinois good/excellent ratings declined 4% to 9%. The Illinois rating now exceeds the previous all-time lowest level for this time of year at 12% in 1988. Indiana gained 4% in good/excellent ratings, which is consistent with its marginal gains in corn ratings after the recent rainfall in the northern half of the state. A well-known commercial grain trading company suggested that US soybean yields range from 37-38 bushels/acre at this point in time. This yield is consistent with trade expectations and recent price action. The company also noted that if no rainfall is seen in the drought-stricken growing areas in the next two weeks, yields could fall to 34-35 bushels/acre. The demand outlook remains robust for soybeans and soybean meal following last year's drought in South America which is supportive to price action long term.