UPDATE 1-EU wheat ends lower as Chicago rally stalls

Recasts with closing fall

PARIS, Jan 22 (Reuters) - Euronext wheat closed lower on Wednesday after Chicago futures retreated from a one-month high, with traders continuing to assess U.S. President Donald Trump's early statements on possible tariffs.

Benchmark March milling wheat BL2H5 on the Paris-based Euronext settled 0.5% down at 230.00 euros ($239.57) per metric ton.

The contract earlier touched a one-week high at 232.75 euros, as it recovered from Monday's six-week low of 225.00 euros on the back of short-covering by investors.

Chicago wheat Wv1 rose to a new one-month peak, supported by concern over winter cold faced by U.S. crops, before tracking weakness in corn. GRA/

“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.

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

($1 = 0.9601 euros)

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

((gus.trompiz@thomsonreuters.com))