HAMBURG: European wheat futures rose on Monday on concern about tighter supplies after Russia withdrew from wartime agreement to allow safe shipment of Ukraine’s grain exports.

September wheat on the Paris-based Euronext rose 0.6% to 233.25 euros ($261.92) a metric tonne at 1501 GMT. But reaction was seen as restrained with world supplies of wheat good despite the loss of some Ukrainian exports, with large volumes of cheap Russian wheat available to importers.

The agreement which allowed the safe Black Sea export of grain from Ukraine for the past year will expire at the end of Monday after Russia said it will suspend its participation.

“Initial market reaction to the news was relatively modest,” one German grains trader said. “I think there is market belief that Russia and the EU have large supplies of wheat which can meet world demand in the coming months, with harvests arriving.”

“Ukraine can also export a lot over land, perhaps around 1 million (metric) tons a month. Only around one ship a day was sailing from Ukraine anyway in past weeks, so the shipping channel was not really working anyway.”

There had been widespread market expectations that the Ukrainian agreement would not be extended. Traders stressed import demand remains weak, with major importing countries in the Middle East and North Africa likely to use their new harvests instead of immediately importing.

“The world has enough wheat but the question for us is whether new export business will be transferred to the EU,” another trader said. “I think the modest market reaction today shows that Russian wheat will be able to meet major import demand with EU Black Sea countries like Romania and Bulgaria also seen with large export supplies.” Meanwhile, transport problems on Germany’s Rhine river were easing as recent rain raised water levels.