The Morning Paper

25/06/12 -- A quick glance at the electronic market will tell you that it's been a hot & dry weekend in the US, with not a lot of relief in sight.

There is little in the way of rain forecast for the entire Midwest for the next 2-3 days, with fair coverage for Nebraska, Iowa, northern Illinois and southern South Dakota in the 4-7 day timeframe. As ever, there's a chance of some more widespread 0.75-1.5 inch coverage in the 8-15 day forecast (1st-9th July), but that is still some way off and recent widely touted rainfall events have largely disappointed (a bit like England in the Euros).

European grains have opened sharply higher, following the US lead, with Nov 12 London wheat up GBP3.95/tonne in early trade to GBP165.50/tonne - it's highest in just over a year. Nov 12 Paris wheat is also at a more than 12-month high of EUR221.00/tonne.

Apart from that fresh news is pretty limited so far. Spain has formally requested a bailout of up to EUR100 billion for its banks. The euro is down a bit on the news even though it was a formality in coming.

EU leaders continue to "talk the talk" ahead of their summit at the end of the week. Last week's EUR130 billion growth stimulus package announced by Germany, Spain, Italy and France seems like another hot air publicity stunt to me.

Meanwhile I read with interest over the weekend one report that points out that of the EUR500 billion that the The European Stability Mechanism (ESM) is supposed to have in its "pledged" theoretical kitty almost a fifth is to come from the already skint Portugal, Ireland, Spain and Greece. A further 18% is meant to come from Italy.

Charity begins at home, they say.

The grains may be up, but crude oil is down again. Having briefly managed to claw its way back up above USD80/barrel on Friday WTI NYMEX crude currently trades at USD79.36/barrel. One report out from Credit Suisse last week suggested that USD50/barrel could be on the cards in a "worst case scenario" before the current slump ends.