Holidays in the US, Asia and the Middle East may slow grain trade

European wheat futures closed lower on Monday, erasing earlier gains, as weak demand throughout the week, accompanied by a string of holidays in several regions, and position adjustments ahead of options expirations dampened trading.

May milling wheat futures, the most actively traded on the Paris-based Euronext exchange, closed down 0.3% at €190.75 ($225.96) per metric tonne, following Friday’s decline.

March futures fell 0.2%, also to €190.75. Dealers said the expiration of March options at the end of the session led some participants to close positions on the front months.

In the US, markets were closed for a public holiday. Traders said demand is also expected to decline due to the Lunar New Year holidays beginning Tuesday in Asia and the Ramadan period in Muslim countries, which also begins this week.

Severe winter weather, which has hampered shipments from Russia, has also raised some market expectations for improved export prospects to the EU.

However, a doubling of domestic wheat production in Morocco following heavy rains could offset any impact from the disruption to Russian supplies.

A futures dealer said the Moroccan boom is “bad news for French wheat.”

Rapeseed futures on Euronext continue to test resistance near €500, after reaching multi-month highs last week amid rising US soybean oil prices.

The price of rapeseed for May delivery rose 1.3% to €492, repeating Thursday’s peak of €492.25, the highest since late July.

“Black Sea prices are firming due to winter weather conditions, which typically disrupt logistics at this time of year,” said a German trader.

“Particularly cold weather in Ukraine and Russia is leading to expectations that some of the wheat harvest has been damaged.”

Tags: prices, wheat