Paris Grains End Lower, But Rapeseed Corrects Last Week's Odd Close

04/05/15 -- EU grains closed mixed on the day, with wheat and corn lower, and rapeseed sharply higher. London markets were closed for the May Day bank holiday and Russia was also on holiday, so activity was light.

The day ended with May 15 Paris wheat closed EUR1.75/tonne lower at EUR176.25/tonne, Jun 15 Paris corn was also down EUR1.75/tonne at EUR155.25/tonne and Aug 15 Paris rapeseed was up EUR10.25/tonne at EUR354.00/tonne.

The sharply higher move in rapeseed futures can best be attributed to a correction of the very strange close posted in the last trading session on Thursday night, when prices collapsed in the last few minutes of trading.

Paris rapeseed then officially closed around EUR12-14/tonne lower in what basically looks like an error.

The old front month May 15 went off the board on Thursday, and trade was very thin ahead of the long weekend. Even so, the net change over the two sessions is still one of a net loss.

Other than that, fresh news was scarce to start the week. The USDA will update us with the latest planting progress and crop conditions report after the close of the Chicago grains markets tonight, with many analysts forecasting corn planting at 50% or more complete, up from only 19% done a week ago.

There's talk of some Midwest farmers already having finished planting corn unusually early, aided by near ideal weather conditions.

The USDA will also give us the latest on US winter wheat crop conditions, placed at 42% good to excellent last Monday.

After that we have Stats Canada due out on Wednesday with their latest Canadian grain stocks report, before the FAO give us their latest global production and stocks data on Thursday.

The latest UK cereals usage and trade figures from Defra are also due at the end of the week, before the USDA update their May WASDE report a week tomorrow.

Sandwiched in between all that is the expiry of the May 15 Paris wheat contract a week from today. That could display some "irrational" behaviour, much as the May 15 rapeseed contract did, in the run up to going off the board.

That's especially true now that Senalia, the operator of the largest silo that is the main delivery point against that contract in Rouen, has hung up the full signs as far as wheat intake is concerned.

The May 15 contract still has an open interest of more than 20,000 contracts - over a million tonnes. That leaves anybody who was planning to make a delivery against a May 15 short in a bit of a pickle.

Crop production prospects in Europe appear to be improving. Most of France has picked up 1-3 inches of rain in the past 7 days, and the forecast for the UK, northern France, and all of Germany, Poland and the low countries is for wetter than normal conditions across the next 14 days.

Temperatures are seen as normal to warmer than normal across most of Europe over the coming fortnight.

Talk of an early end to, or at least a reduction in, the export duty on wheat in Russia is gathering momentum as confidence appears to be growing that their 2015 crop might not end up as low as was feared back in the winter.