Morning Vibe

06/04/11 -- My mate Joachim from Dienstleistungszentrum Ländlicher Raum (DLR) - which I think is a kind of German equivalent to Harper Adams, but I stand to be corrected on that as my knowledge of the language consists of "two large beers please" and "you appear to have forcibly annexed my sun lounger" - has sent me this picture of the winter rapeseed in his neighbourhood (you can click the image to enlarge).

It's certainly looking far from great, one word that describes it might be "patchy". Germany only got between 10 and 30% of normal rainfall in March, according to Martell Crop Projections, and it's certainly showing in this picture taken on 3rd April.

It doesn't look like they've had an awful lot of rain in the past few days either from what I can tell. The weather front that's brought some rain to the UK and northern France over the past couple of days seems to have fizzled out before reaching Germany. Any rain that they have had looks like it's been very light and scattered over central and southern areas.

The overnight Globex grains see corn down a little, retreating from last night's record highs, but wheat and soybeans are firmer again.

For wheat there are now several bullish stories gathering momentum:

  • Soaring US corn prices leading to increased feed usage

  • Extremely poor US winter wheat conditions, and a potentially high level of abandonment (forecast at 19% by Informa), encouraged by the high price of other alternative crops

  • Slow Russian spring plantings due to the late arrival of spring

  • Downgrades to Ukraine production

  • Dryness concerns in many parts of Europe

See also Oklahoma sees driest 4 months since Dust Bowl

The pound hit 1.6360 against the dollar this morning, trading close to it's best levels since Jan 2010 as ideas of an early interest rate hike resurface. It peaked around 1.64 a fortnight ago, and as with previously this has proven a difficult nut to crack.

So it would seem again this morning as we have now slipped back below 1.63 after disappointing industrial and manufacturing production data for February came out at 9.30 BST. That showed UK Feb industrial output rose by 2.4% year-on-year compared to analysts forecasts of 4.3%. Manufacturing output rose by 4.9% annually, compared to predictions of 5.8%.