May soybeans were up 9 1/4 cents late in the overnight session. China soybean futures were down.1% and palm futures in Malaysia were up as much as.8% to a new 4-week high before closing up.4% in overnight trade.

The results of the USDA Supply/demand report for release this morning should set the tone for the market today. Fund traders were active buyers yesterday to support the solid recovery bounce off of the lows but it may take a supportive surprise in the data to drive the market much higher. A firm tone to gold and energy markets and a weaker US dollar overnight might help provide some support.

A drop in ending stocks of near 25-30 million bushels is expected this morning due to higher estimates for both export and for soybeans crushed. Ending stocks were at 245 million bushels in the last report as compared with 138 million last year. This is expected to be offset by higher stock numbers for the world report and continued adjustments higher in South America production.

The USDA increased the Brazil soybean forecast to 65 million tonnes last month, up 2 million from December and up from 57 million last year but near ideal weather and crop conditions has traders leaning for another jump in estimates from the USDA today. Brazil's Agriculture Minister pegged the crop at 66.7 million tonnes, up from their estimate in January of 65.1 million. Argentina production was pegged at 53 million tonnes last month as compared with 32 million tonnes last year. World ending stocks for the 2009/10 season are already expected to jump 16.9 million tonnes from last year to 59.8 million tonnes.

Funds were significant buyers in soybeans and oil yesterday and more moderate buyers in meal. Weekly export inspections came in at 39.6 million bushels versus 43.6 million last week. This was the third straight decline from the previous week's total. Total inspections to-date stand at 71.2% of the USDA's projected export total for the marketing year versus a 5-year average of 58.1%. Traders indicate that the market is expecting export demand for soybeans to start to slow ahead of the Lunar New Year in China this weekend.