Photostream in iphoto keeps saying I need to be signed into icloud!

When ever I try to turn on Photostream in iphoto it says "In order to use Photo Stream, you have to be signed into your iCloud account in System Preferences." But when I check I appear to be signed in. Whenever I go to system preferences and click on icloud it even has photostream checked and it shows my purchased extra icloud storage. Icloud account details also correctly shows my apple id - however I cant see where I would have put in my password - it just has a name and description field so maybe it has something to with that.