November soybeans were 15 cents higher overnight. Malaysian palm oil closed up 3.5% overnight following a very sharp break last week. Traders there credited the rise to a recovery in crude oil. The crude oil market was sharply higher and the dollar was sharply lower overnight.

A bad week in stocks last week translated into a bad week for the soybean complex with the November soybean contract finishing at limit down on Friday and extending its losses overnight to beyond the synthetic lows indicated by options prices on Friday. This took the November soybean contract below 900 for the first time since early September, 2007. The USDA's Crop Production and Supply and Demand reports out on Friday before the open added to the negative sentiment according to traders. The USDA pegged the US soybean yield at 39.5 bushels versus 40 bushels on the September report. Planted acreage was revised higher to 77 million acres, up 2.2 million from last month, which put the US soybean crop at 2.983 billion bushels compared to 2.934 billion bushels last month and 2.676 billion bushels last year. This was about 60 million bushels more than traders expected. Ending stocks were raised to 220 million bushels compared to 135 million bushels last month, and beginning stocks were raised to 205 million due to the jump already seen on the September Quarterly Stocks Report. Traders expected ending stocks near 185 to 190 million. World ending stocks for the 2008/09 season were adjusted higher to 55.24 million tonnes versus 51.23 last month. The Commitments of Traders Report for the week ending 10/07 showed that index funds were large net sellers of over 14,000 contracts, reducing their net long position to 115,820. However, trend-following funds were net buyers of 2,736 contracts to hold their net long position at nearly 16,000 contracts. Fund action was similar in oil where index funds were net sellers of 3,259 contracts and trend-following funds were very small net buyers. Harvest progress remained brisk over the weekend with warm and mostly dry weather allowing a near optimal rate of advance in most areas.

Rain is expected to move into the western and NW corn and soybean belts today and finish sweeping through to the eastern/southeastern growing areas by Wednesday. This should be followed by clear weather in most of the Midwest into the weekend. Cooler temperatures are expected this week with a warmup into the weekend. No new export tenders are scheduled.