January soybeans were 1/2 cent lower late in the overnight session. The dollar was higher again overnight. Malaysian palm oil was up 2% to its highest level in 3 months.

The soybean market advanced overnight although it gave up most of its gains late in the overnight session as the dollar moved sharply higher. Meal moved lower on the day late in the overnight session while oil pushed marginally higher. This brought a minor correction of yesterday's sharp gains by meal. One analyst says that the markets are adjusting to end the week with good export demand supporting soybeans and spread traders also making adjustments in inter-commodity spreads such as meal/oil and the soybean/corn ratio.

Mostly dry conditions are expected this weekend and this should result in fair harvest progress on next Monday's USDA Crop Progress report according to one analyst. The next rain system could push into the southern Midwest from the south by Sunday or early next week and the 6-10 forecast calls for above normal rain in the eastern Corn Belt. Below normal rain is expected in the 6-10 day period in the western soybean belt and some of this longer term moisture could eventually come in the form of snow.

The USDA announced a sale of 116,000 tonnes of soybeans to China for 2009/10 before the open yesterday, and traders said that this was considered supportive. Weekly export sales came in at 1.349 million tonnes as compared with expectations of less than 1.0 million. Nearly 725,000 tonnes of this week's sales were to China with over 142,000 to Mexico. Cumulative soybean sales stand at 73.3% of the USDA forecast for the season vs. 49.0% as the 5-year average for this time of the year. Sales need to average just 227,000 tonnes in soybeans each week to reach the USDA forecast. Meal sales were 357,500 tonnes for the 09/10 season to drive cumulative meal sales to 51.3% of the USDA forecast for versus a 5 year average of 34.2%. Sales need to average 94,000 tonnes each week to reach the USDA forecast. Net oil sales came in at 12,400 tonnes to reach 45.3% sold for the year vs. the 5-year average of 22.3%.

Argentina soybean growing areas received needed moisture over the past 24 hours as expected. Coverage was uneven, but totaled up to 2 inches. Planted area has reached 44.2% according to the Buenos Aires Grain Exchange, up 10.4% from last week but still slightly behind last year. Southern Brazil remains overly wet, with more rain forecast over the next few days. Other soybean growing areas in Brazil are experiencing mostly favorable conditions.