January soybeans were 5 3/4 cents higher overnight. Palm oil in Malaysia finished more than 3% higher. Crude oil made another minor new low, and the dollar index was lower.

Soybeans finished lower yesterday after a mid session rally failed. Prices moved higher overnight but remained in a narrow range. Strength in palm oil overnight was credited to the fact that India instituted a 20% import tax on crude soybean oil, which is expected to shift some of that country's substantial import demand for vegetable oils from soy into palm oil. Palm oil imports are currently not taxed by India. This new tax is intended to support prices for domestic soybeans and soybean oil, and it comes against a backdrop of moves in a number of countries to support prices. For example, China announced in recent weeks that it was establishing a strategic reserve in soybeans and raising price supports in grains to ensure that domestic producers continue to generate at least 95% of that country's food needs. Traders said that the India tax may have pressured soy oil overnight and supported meal and soybeans. Reports that China is in the market for soybeans was also thought to be supportive. Cold weather is forecast in the US Midwest late this week and into the start of the weekend. One analyst said that this could bring a minor improvement in feed demand. Dry weather in central Argentina continues to stress early soybean plantings and bring minor delays in planting progress. The USDA will issue its weekly Export Sales Report tomorrow, and this will give traders an indication of whether demand is continuing to erode from the burst in sales seen in late October.

Conditions remain the same in South America with Brazil seeing generally favorable growing conditions in corn and soybean areas and Argentina still dry, especially in central Argentina. The US is also still expected to be dry through the weekend in most grain areas, but temperatures are expected to be a bit colder than previously forecast into Friday and Saturday in the central and northern Midwest. Snow is still expected in the extreme northern and NE Midwest into the weekend. Rain is expected to move into the SW Plains on Saturday and Sunday with showers pushing through the central Midwest early next week. Iran is in the market for up to 25,000 tonnes of soy oil and up to 20,000 tonnes of sun oil. India is in the market to buy 26,500 tonnes of edible oils by mid-November.