European milling wheat futures rose on Monday to their highest in nearly eight months as buying linked to options reinforced support from nervousness about the risk to crops from freezing conditions across Europe.
March milling wheat on the Paris-based futures market was up 5.00 euros or 2.3 per cent at 222.25 euros a tonne, a level last seen on the contract on June 15.
The market also remained underpinned by worries about the impact of severe winter weather, notably in Russia and Ukraine.
“People are concerned and the market is pricing uncertainty about weather damage,” the trader said. “All of Europe is being affected by this freeze.”
Paris futures had rallied last week as freezing conditions swept across Europe, before consolidating at the end of the week as Russia said it would not curb grain exports in April.
But any crop losses within the European Union were expected to be less severe than in the Black Sea region.
“The overall outlook for the European soft wheat crop remains positive and although we may have some winterkill at this juncture there is little reason to believe that from a European perspective it will be greater than seasonal averages,” Jaime Nolan-Miralles of FCStone Europe said in a note.
In France, freezing weather was expected to continue in most of the country for the whole of this week, although minimum temperatures were forecast to be less severe than last week.
The conditions are thought to have put some crops at risk, especially in eastern France where temperatures have fallen furthest, even if big losses were not expected at this stage.