Chicago wheat futures rose, extending recent gains, as escalating conflict in Iran could further increase energy and fertilizer costs for farmers, while unfavorable weather conditions continue to affect U.S. croplands.

Missile attacks persisted over the weekend in the Middle East, with Iran and its proxies targeting allies of the United States. As the conflict enters its second month, market concerns over a widening war have intensified. These attacks, along with the effective closure of the Strait of Hormuz, have hampered the export of fertilizers and fuels from the region, raising input costs for agricultural producers worldwide.

Persistent drought in the U.S. Plains has also supported wheat prices and threatens output in this key growing region. The National Weather Service indicated on Monday that "unusually warm, dry, and windy" conditions are expected early in the week across parts of the West into the Plains.

On Monday, wheat futures on the Chicago Board of Trade climbed as much as 1.2% before paring some of those gains.

In a Friday report, CRM AgriCommodities noted, "Grains and oilseeds have so far seen relatively limited direct impact from the war. However, if the conflict extends from weeks to months, its effects on supply chains should not be underestimated."