Early Vibe

21/03/11 -- The bulls are firmly back in the driving seat to start the week it would seem. Events over the weekend don't appear to have done too much harm, with the Japanese nuclear situation improving slightly and the UN strikes on Libya getting off to a reasonably good start.

Bullish, but with caution, is maybe the theme this morning. Certainly recent wild market fluctuations will have taken a lot of the gung-ho mentality away. Whilst money that was taken out early last week does appear to be coming back in again, sell stops will be in place for if and when the unpredictable comes along.

Spring is officially here and we are set for a fairly dry, warm and settled week ahead here in the UK. France could do with some rain, but the situation there is far from critical, yet.

Mar London wheat goes off the board on Wednesday, and with a current open interest of none there isn't likely to be an awful lot of action there over the next couple of sessions.

Nov11 London wheat opened GBP2.65/tonne higher early doors but has slipped away a little since then to currently stand GBP0.30/tonne lower. Paris wheat also opened in positive territory but has also turned red in the last fifteen minutes or so.

The Globex market is also drifting back off the overnight highs with beans up 2-4c, corn up 8-12c and wheat up 6-8c.

The pound is nudging 1.63 against the dollar again for the first time in a fortnight ahead of inflation figures due out tomorrow. If they're bad, and I think that they will be, then ideas that an interest rate rise is on the cards before too long will resurface.

Sources in Brazil's Rio Grande do Sul report that, unlike in Matto Grosso, conditions are "just perfect for levelling out the crop before harvest" and that "quite a lot of what they’re loosing in production in the center-west of the country is being made up for here."