HAMBURG: European futures rose on Monday amid concern that a standoff between Russia and Ukraine could lead to a conflict that disrupts wheat shipments.
Rumours Algeria could resume buying French wheat and an export-boosting weakness in the euro also gave support.
Algeria issued a new wheat tender on Monday but for shipment to small ports which could signal a small purchase is planned.
March wheat on the Paris-based Euronext exchange unofficially closed up 8.50 euros, or 3.1%, at 281.00 euros ($318.01) a tonne.
“Geopolitical factors are supporting Euronext today with the possible conflict between Russia and Ukraine causing worry about disruption to wheat shipments coupled with expectations the EU could gain more export sales,” said Michael Magdovitz, senior agriculture commodities analyst at Rabobank.
“Russia and Ukraine are among the most important wheat exporters in the world and so any possible fighting which disrupts grain shipments is of concern. If this happens, EU wheat would be a potential replacement in the main markets of Ukraine and Russia in the Middle East and Africa.”
NATO said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and aircraft, a move Russia denounced as an escalation of tensions. Britain and the US are withdrawing some staff from embassies in Ukraine.
“The news about embassies withdrawing personnel caused worry in the market,” one trader said.
There was also talk Algeria could reopen its wheat tenders to French wheat.
“A report was circulating in the market today that France and Algeria are back in discussions, perhaps giving French wheat a chance again in Algeria’s next tender,” another trader said.
German traders also expected more EU wheat sales due to Black Sea tensions.
“If Russia and Ukraine do not export because of their conflict the next logical and next cheapest origin is the EU,” one German trader said.
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