LONDON - European wheat prices rose on Friday in a technically-driven rally from the prior session's 3-month low but the scope for any significant rebound remained capped by plentiful supplies.
March wheat futures in Paris rose 0.75 euros or 0.4 percent to 175.75 euros a ton by 1730 GMT. The contract had dipped to a 3-month low of 174.00 euros on Thursday.
"The bounce is mainly technically driven and is likely to peter out soon," a futures dealer said. "Fundamentally nothing much has changed and we're in the bearish trend we've seen since November."
Dealers said there was likely to be increased competition from Argentina in coming weeks, following the devaluation of the country's currency, making export markets even more challenging.
"Add in the fact that currently there are no major weather concerns and new crop looks in good shape, maybe too good, and it does little to shake off the bearish sentiment," David Sheppard, managing director of UK merchant Gleadell said.
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Feed wheat futures in London were also higher although dealers noted the slow pace of UK exports made it likely there would be large stocks left at the end of the 2015/16 season.
"We will have less than 1 million tons shipped out of the UK by the end of this year and the prospect of exceeding 3.5 million tons exported by harvest looks increasingly remote," Frontier Agriculture said in a market update.
"This will mean a continuation of old crop prices trading at a discount to new crop and another season of substantial end of season carryover stocks."
May feed wheat rose 1.75 pounds or 1.5 percent to 117.50 pounds a ton, rebounding from a contract low of 115.50 pounds set on Thursday.
