European benchmark wheat futures in Paris rose on Monday in light trade, supported by renewed strength in US markets, but large inventories in Europe again curbed gains. Benchmark May milling wheat on the Paris-based Euronext market unofficially closed up 1.75 euros or 1.1 percent at 156.50 euros a tonne at 1547 GMT, moving further away from a contract low of 151.00 euros hit earlier this month. Chicago wheat firmed on Monday, buoyed by background concerns about poor crop weather in the United States and higher corn.
Large short positions held by financial investors meant grain markets are currently prone to bouts of buying as the crucial spring crop period in the northern hemisphere approaches.
"In the current context, the slightest weather setback will encourage investment funds to buy back positions," consultancy Agritel said in a note. "The potential upside to prices remains limited, however, given the bearish supply and demand balance."
French port loadings continued to be brisk, reflecting competitive export prices. Data showed a vessel due this week to load 60,000 tonnes of wheat for Yemen and more shipments to Morocco.
German cash premiums in Hamburg were weaker on reduced demand.
Standard wheat with 12 percent protein content for March delivery was offered for sale at 1.50 euros over the Paris May contract against 2 euros over on Friday. Buyers were seeking 0.5 euro over Paris.
Polish prices were mixed but under pressure from low demand.
Polish mills were offering to buy 12.5 percent protein content wheat at 610-650 zloty a tonne for March delivery to mills (142.4-151.7 euros), down about 5 zloty on the week, with prices varying regionally.
Exporters are offering to buy 12.5 percent protein wheat at 655-660 zloty a tonne for March delivery, up about 5 zloty.
"Consumers in Poland see that local farmers have large stocks and with export prices sluggish, consumers are not in a hurry to buy," one Polish trader said. "Local demand is still very slack consumers are buying only from hand-to-mouth." Polish wheat has suffered some frost damage this winter so some farmers hope that prices will go higher.
"Farmers are not happy with the current prices and are not selling substantial quantities as some expect higher prices in the future," a trader said. "In some regions farmers have already started sowing spring grain due to good weather and may not have time for many grain sales in the next 2-3 weeks."
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