November soybeans traded 35 1/2 cents lower overnight. Malaysian palm oil finished 1.7% lower. Indonesia was also lower, but traders there reported some demand at lower levels. Crude oil was also lower and the dollar mostly firm overnight.

November soybeans opened lower in the overnight session and worked its way lower throughout the session to close near the lows. This followed a sharp break to limit down in soybeans, meal and oil during course of the session yesterday. Traders indicate the long liquidation and the potential for eroding demand is weighing on both the soybean complex and corn. The USDA will release its latest Supply and Demand Report on Friday this week, and this will give the market a better indication of current tends in demand. Moderate to heavy rains may be providing some support on the way down, along with the fact that crop conditions improved by a bit less than expected on the latest weekly report from the USDA. The weekly soybean conditions report showed 59% was rated good/excellent compared to 58% last week and 65% last year. The 10 year average for this time of year is 63%, so current conditions are not very far out of line. The Commitments of Traders Report for the week ending July 1st showed that funds were net buyers in soybeans. Trend following funds were net buyers of 5,389 contracts, while index funds were net buyers of just 100 contracts. Small traders were net buyers of 6,770 contracts, reducing their net short position to 23,484 contracts in soybeans. In oil, funds were also net buyers, with trend following funds net buyers of 1,077 contracts and index funds net buyers of 2,594. Small traders were also net buyers of 1,981 contracts in oil, raising their net long position to 17,518 contracts. In meal, non-commercials were very small net buyers of just 263 contracts. Small traders were net buyers of 2,937 contracts in meal. While there will be more accurate planted and harvested acreage data in August, the trade seems more and more convinced that the soybean crop in the US is closer to 3 billion bushels and not the 3.105 billion posted in the June supply/demand report. Assuming normal trendline yield, a 3 billion bushel crop would only leave about 70 million bushels in ending stocks, and since this is too tight, some price rationing may be necessary. Only 12% of the crop was blooming by Sunday as compared with 26% as normal for this time of the year. Deliveries against the July contracts were 0 for soybeans and oil and 1 meal contract delivered.

Moderate to heavy rains have fallen across a broad swath of Iowa, southern Wisconsin, much of Illinois and into southern Indiana over the past 36 hours. The forecast through July 14th calls for wetter than normal conditions in all major growing areas except parts of southern Minnesota and into South Dakota along with extreme southern Illinois and adjacent areas of SE Missouri and western Kentucky. Much of this moisture has already fallen with the rains of the past 36 hours, but additional, more moderate rains are expected in other growing areas at least into this weekend. All growing areas are expecting normal to above normal temperatures over this stretch as well. India is tendering for 24,000 tonnes of soyoil from South America for July and August shipment. No tenders are scheduled for soybeans.