EU wheat holds firm as weather, Trump trade moves watched

PARIS, Jan 22 (Reuters) - Euronext wheat rose for a second day on Wednesday, supported by winter weather concerns in the northern hemisphere and some relief over a lack of immediate tariffs from U.S. President Donald Trump against trading partners.

Benchmark March milling wheat BL2H5 on the Paris-based Euronext was up 0.4% at 232.25 euros ($242) per metric ton by 1702 GMT, after earlier touching a one-week high at 232.75 euros.

The contract was recovering from a six-week low of 225.00 euros on Monday, with short positions held by investors leaving the market prone to short-covering waves, dealers said.

Financial investors expanded sharply their net short position in Euronext wheat last week, data published by the exchange on Wednesday showed.

Chicago wheat Wv1 also edged up as traders monitored severe winter cold in the United States that could damage some wheat crops. GRA/

The return of wet weather to France, where some areas remained soggy after torrential rain last year, and a lack of snow cover for crops in parts of Russia after unusually mild conditions, were also being watched as potential risks.

Price gains were more moderate than on Tuesday, with traders digesting more statements by Trump on potential tariffs.

“I think there is still relief in the market that the new Trump government seems to be milder than feared on trade sanctions against the EU which could easily have an impact on agricultural markets,” a German trader said.

However, comments by Trump on Tuesday threatening the European Union with tariffs, as well as a 10% punitive duty on Chinese imports, tempered initial optimism after he did not impose levies on his first day in office on Monday.

Strong export competition continued to curb price sentiment in Western Europe.

“Russian prices are not rising while Romania and Bulgaria seem still to have a lot to sell,” the trader added. “Exports are flowing out of Ukraine without Russian interference.”

A 60,000-ton wheat purchase in a tender by Jordan on Tuesday was tipped to be supplied from Romania.

Russian 12.5% protein wheat for February shipment was on Wednesday around $233-$238 a ton free on board (FOB), generally holding below the $240 level.

Russian 11.5% protein wheat was around $228-$230, Romanian 11.5% protein wheat was $235 to $238 while 10,000 tons of Ukrainian 11.5% milling wheat was offered for sale around $235.

($1 = 0.9598 euros)

(Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Emelia Sithole-Matarise)

((gus.trompiz@thomsonreuters.com))