Soybeans traded sharply higher overnight but have since come under a significant amount of selling pressure near 7:30 am CST. November soybeans were down 21 cents while the September contract was down 23 cents. Pressure from the corn and wheat markets has spilled over to soybeans, accelerating the downside move. Malaysian palm oil ended the day lower as traders took profits on thoughts that Malaysian palm oil stocks will rise. Traders also remain cautious ahead of the European Central Bank's meeting on Thursday. There was no August soybean or soybean meal deliveries. August soybean oil deliveries totaled 2,656. Deliveries now total 5,708 month to date. Chinese Shares were higher overnight, with the Chinese PMI report barely holding above the growth/no growth reading of 50.0. European shares were also higher and that is a little surprising considering the sweep of soft scheduled data flows from the EU. In fact, weak Factory orders data clearly fostered increased concerns of entrenched slowing in the Euro zone but the proximity to the ECB meeting on Thursday morning probably served to keep sentiment on a slightly positive track. While the US report schedule will be active today with Construction Spending, ISM Manufacturing and an On-line help wanted release, the main focus of the trade is likely to be on the early afternoon statement from the US Fed. Trade sentiment on the US Fed result today, mostly centers on supportive dialogue that is expected to stop just short of a definitive move on policy. The soybean market has completely shifted it's focus towards the weather over the next two weeks, as nearly half of the US crop is now setting pods. 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. The Midwest weather outlook for the next 2 weeks is offering support but scattered showers are expected in the northern plains, parts of the central Midwest, and the eastern Corn Belt over the next 7 days. Accumulation is expected to be light and be of very little benefit to soybean crops. The rainfall may only amount to.50-.75 inches and local amounts could be an inch or more. The blistering temperatures today and tomorrow for the west central and southwestern Corn Belt will continue to stress soybean crops. Cooler temperatures are expected early next week, which may provide some relief to crops. Topsoil conditions remain extremely dry and the limited precipitation will likely evaporate before it even has a chance to settle into the soil. Another round of above normal temperatures is forecasted for later next week. Volume in the soybean complex as drifted lower this week, signaling that traders are waiting for more concrete evidence of a further drop in US soybean yields before extending positions. The market tone is still generally bullish long term as the demand outlook is still robust and the domestic balance sheet continues to tighten. Current price levels and crop reports suggest the market is trading a yield between 38-39 bushel/acre. A 39 bushel/acre yield would imply 2012/13 ending stocks well below minimum pipeline levels and would call for extreme amounts of demand rationing by higher prices. The market is also looking ahead to the highly anticipated USDA report next week. The trade believes the USDA could trim the soybean yield slightly but extreme cuts are unlikely since there is still a glimmer of hope for some of the growing area if weather turns better in the next 14 days. Reports continue to circulate around the market that soybean plants look small and pod counts might be low. While the soybean plant can withstand the severe weather better than corn, topsoil conditions have been so poor around the Corn Belt that some of the plants may never have a chance to develop to their full potential. Weather for the next two weeks will be closely followed as it will determine the short term price trend for the soybean complex. The Dalian Commodity Exchange lifted soybean meal margins overnight which could have added to the downside move this morning.