May soybeans traded 7 cents lower in the overnight session. Malaysian palm oil fell nearly 4% during the session today but settled down less than 2%. Crude oil was somewhat higher.

Prices traded in a very tight range overnight and stayed within yesterday's trading range in the process. The strike in Argentina continues, with both sides indicating an unwillingness to back down, according to local sources. According to one analyst, this unexpectedly powerful development shows the fragility of the world supply situation due to ongoing tightness in stocks of soybeans. He added that while high prices are generating increased acreage expectations in the US and acreage and yields are generally quite good in South America, the world's supply chain may remain vulnerable to weather, technical and political considerations through the remainder of this year. A number of major companies have declared a force majeure on shipments out of Argentina, and they are scrambling to find needed supplies of soybeans and products in the US and Brazil, as was the case earlier this week, according to cash market sources. The main interruption has been in the flow of commodities to China, but Europe and other points in East Asia are also being affected. Funds were buyers in the complex again yesterday, with at least 4000 contracts bought in soybeans and oil and 2000 bought in meal. Basis levels were sharply lower along the river yesterday, down as much as 10-15 cents due to higher rates for barges. This was caused by the upcoming 1-week closure of a lock 60 miles north of St. Louis. Basis levels at interior points were steady to firm.

Brazilian weather has become somewhat drier in the north, and this is expected to continue. Harvest progress has passed 50% and is ahead of last year, despite rains in the north over the past several weeks. South American weather is fast becoming a non-factor. No new tenders again today. The river system will be disrupted for one week starting Friday by the closure of a lock 60 miles north of St. Louis. The force majeure in Argentina continues to shift demand to the US.

Weekly export sales for soybeans, released before the open, came in at 369,600 metric tonnes for the current marketing year and 162,700 for the next marketing year, for a total of 532,300. Meal sales came in at 158,600 metric tonnes for the current marketing year and 22,000 for the next marketing year, for a total of 178,800. Oil sales came in at 42,000 metric tonnes for the current marketing year alone, none for next year.