LONDON: Wheat futures rose on Monday as hot, dry conditions in several key producing countries diminished crop outlooks while soybeans climbed to a three-week high.
The Chicago Board Of Trade most-active wheat contract was up 1.6 percent at $5.38-3/4 a bushel by 0919 GMT.
"In the EU, a prolonged period of hot and dry weather has seen the domestic wheat crop downgraded, whilst in Australia, drought conditions have led to a downgrading of the crop there as well," ING said in a market note.
Farmers in Germany need special aid of around 1 billion euros ($1.17 billion) because of damage to harvests caused by drought and heatwave, the head of German farming association DBV said on Monday.
"There are increasing calls for further financial aid from the government in the agricultural sector, be it because of the trade dispute - the US administration has already announced support for affected farmers - or because of the damage caused by the hot and dry conditions," Commerzbank said in a note.
The bank added that several key suppliers of grains and oilseeds were currently being affected by the exceptional weather conditions.
"Australia for example is experiencing one of its driest winters in history, and the government has approved financial aid for the transport of feed and water to regions particularly hard hit."
December milling wheat futures on Paris-based Euronext were up 1.0 percent at 201.75 euros a tonne.
World wheat production is set to fall to a five-year low following significant downgrades to crop prospects in the European Union and Russia, the International Grains Council said last week.
Dealers said the oilseed market was also supported by adverse crop conditions in some areas.
Consultancy Strategie Grains further reduced its forecast for this year's European Union rapeseed harvest, citing downward revisions for northern Europe, particularly in France, Germany, Poland and Denmark.
CBOT soybeans were up 0.6 percent at $8.90-1/4 a bushel after climbing to $8.96-1/2, the highest since July 9.
US soybeans were being quoted at a deep discount to supplies from Brazil, prompting a pick-up in demand from many countries even as China, the world's top buyer of the oilseed, continued to shun US soybeans because of the two countries' trade disputes.
Traders say China will be forced to pick up some US soybeans to meet its needs in the months ahead as South American supplies dwindle.
CBOT corn prices also rose with the most active contract up 0.7 percent at $3.79 a bushel.
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