January soybeans were 7 1/4 cents lower overnight. Palm oil futures in Malaysia finished lower. The dollar was higher and crude oil was lower.

Trade was mixed in soybeans yesterday with and nearbys gained on deferreds which traded lower yesterday. Prices were lower overnight with nearby contracts again gaining on deferreds. Traders attribute the bullish action in soybean spreads to increased tightness at Midwestern processors and at the Gulf. This has caused a tightening in some basis levels with some processors said to be considering a reduction in crush operations. Cash market sources indicate that farmers are very tight holders, and inclined to remain that way through the end of the year. Statistics Canada will issue its latest production estimates and this is expected to result in a record canola crop. The previous estimate was based on information gathered prior to final maturation of crops in Canada, and late weather in major growing areas there was excellent. The USDA will issue its latest Export Sales Report this morning. Traders are looking for another strong figure in soybeans although possibly lower than last week. Deliveries against the December contracts were 1 contract in meal with a total to-date of 7. Oil deliveries were down at 245 contracts with a total to-date of 4,445. The USDA supply/demand updates still show poultry production for the 1st quarter of 2009 at down only 1.8% from last year and 2nd quarter production down less than 1% from last year. Egg data suggests there could be significant revisions lower ahead. Commercial hatcheries set 203 million eggs in incubators for the week ending November 29th, down 8% from last year. Chick placements for the week were down 10%. This has implications for meal demand into the 1st quarter.

Conditions have been mostly dry with scattered light showers in dry areas of Parana and Rio Grande do Sul. The forecast is for more of the same. Major growing areas of Argentina were also mostly dry over the past 24 hours and this is expected to continue through tomorrow. In the US, some snow is expected in the NE Plains along with very cold temperatures across the north central US. Mostly dry conditions are expected elsewhere in the Plains and the Midwest through the weekend. A division of Taiwan's Breakfast Soybean Procurement Association bought 56,000 tonnes of US soybeans on a tender scheduled for 30,000 to 60,000 tonnes.