On Thursday European wheat futures had tumbled to their lowest level in almost five months as year-end selling accelerated, fuelled by a slide in Chicago and worries about stalled US budget talks. "This is a technical rebound," one trader said. "For the moment the rebound does not offset the low seen last week," one trader said. "We remain cautious until the start of next year," he said, adding the rise did not necessarily mean markets were going to continue to firm.
Traders pointed to some supportive factors such as a big line-up of loadings in French ports to clients such as Egypt, Algeria, Tunisia, Yemen, Cuba and even Libya. Commodities markets in London and Paris are set to close at midday on Monday and remain closed on Tuesday and Wednesday due to the Christmas holidays. Chicago soybeans rose on Monday, underpinned by bargain hunting after prices slid to a one-month low last week, while wheat got a boost from concerns that dry weather was hurting the US winter crop.
The euro was up 0.2 percent against the dollar at $1.3219. It hit an eight-month high of $1.33085 last Wednesday. However, a lack of progress since then in US budget talks led market players to dump the euro for the safe-haven dollar, that tends to rise in times of market stress. Russian wheat prices are expected to hit new highs next year thanks to tight supply and worsening prospects for the 2013 winter crops.