EU wheat rises back above €200 amid Middle East war concerns

European wheat futures rose on Thursday, moving back above the psychological level of €200 per tonne as the ongoing war involving the US, Israel and Iran pushed crude oil prices higher and added volatility to global markets.

May milling wheat, the most active contract on Euronext, settled 1.3% higher at €202 ($234.08) per metric ton, approaching Tuesday’s six-month high of €205.

Prices had eased on Wednesday as investors hoped the conflict would be short-lived, stabilizing oil markets. However, renewed concerns about potential disruptions to energy supply and maritime shipping routes drove crude oil prices sharply higher again on Thursday.

“The market appears set for continued volatility as traders weigh geopolitical risks and technical momentum against relatively comfortable global grain supply,” the UK grain merchant ADM Agriculture said in a market note.

A weaker euro against the US dollar also supported wheat prices on Euronext, as the dollar gained safe-haven demand amid geopolitical uncertainty.

For now, the impact of the conflict on physical grain supplies remains limited, as many importers typically secure purchases ahead of the Muslim holy month of Ramadan. However, some buyers have already reported logistical difficulties due to disruptions in shipping routes.

Traders say shipments into the Gulf region have become difficult, prompting companies to search for alternative unloading ports. Concerns are particularly focused on the situation around the Strait of Hormuz, one of the world’s most important maritime corridors.

There have also been initial inquiries about possible resales of cargoes carrying corn and wheat that are already at sea. Market participants say such activity could intensify if the Strait of Hormuz remains blocked and no quick alternative ports are found.

At the same time, there has been no visible rush to secure additional wheat supplies. Traders noted that the upcoming wheat tender by Tunisia is considered part of regular demand rather than a crisis-driven purchase.

However, rising freight costs could still affect export markets. According to one trader, Tunisia’s tender could turn out to be “more of a freight tender than a wheat one.”

Market participants are also closely monitoring tensions in fertilizer markets, which could potentially influence farmers’ planting decisions and crop management in the coming months.

Tags: wheat, EU, prices