EU wheat holds at three-week high on tariff relief

PARIS, Feb 4 (Reuters) - Euronext wheat futures held around a three-week peak on Tuesday as the suspension of U.S. tariffs against Canada and Mexico along with a limited riposte by Beijing to U.S. levies on Chinese imports eased concerns about disruption to grain trade.

Signs of reduced wheat availability in Russia and strength in corn prices also underpinned Euronext, though lagging French exports remained a curb.

March wheat BL2H5 on Paris-based Euronext was up 0.1% at 234.75 euros ($243.51) per metric ton by 1713 GMT. It earlier reached its highest since Jan. 13 at 235.50 euros, slightly above a previous three-week top from Monday.

After news during Monday's session that U.S. President Donald Trump had agreed to postpone planned U.S. tariffs against Mexico, a similar delay agreed with Canada further removed the immediate risk of upheaval in trade flows.

Washington did proceed on Tuesday with a new 10% tariff on all Chinese goods, but retaliatory tariffs unveiled by Beijing were seen as limited and crops were not among products targeted.

"Trade disputes and tariff wars are a great threat to commodities but at least the first Chinese response to U.S. tariffs is not focused on grains and soybeans," one German trader said.

Uncertainty over U.S. tariff policy has taken attention from a backdrop of rising corn prices amid weather setbacks in South America, which could shift some feed demand towards wheat, Argus analyst Maxence Devillers said.

Rising Russian prices, as exports from the world's biggest wheat supplier were slowing amid ebbing supply, were also lending support to Euronext.

But at about $240 per ton free on board (FOB) for March shipment of 12.5% protein wheat, Russian prices early this week were nonetheless about $10 cheaper than west EU and Baltic origins, the German trader said.

Russian and Argentine 11.5% wheat, meanwhile, were similarly priced at around $233-$236 a ton, he added.

European Union soft wheat exports so far this season have reached 12.51 million tons, down 37% from a year earlier, European Commission data showed on Tuesday.

EU exports have been curbed by low French shipments.

"As long as French exports are so far behind, Matif (Euronext) prices may stay below 240 euros," Devillers said.

($1 = 0.9640 euros)