EU wheat and rapeseed hit lows as tariff battle heats up

PARIS, March 4 (Reuters) - Euronext wheat futures extended losses on Tuesday to a six-month low while rapeseed tumbled to a one-month low as U.S. tariffs and retaliatory measures from China and Canada deepened concern about disruption to agricultural trade.

May wheat BL2K5, the most active contract on the Paris-based Euronext, settled 0.9% down at 223.50 euros ($235.46) a metric ton.

The contract earlier dropped to 222.75 euros, its lowest since August 28 and below Monday's three-month low.

Euronext also faced pressure from a rally in the euro EUR= against the dollar as tariff worries fed uncertainty about the U.S. economy. FRX/

U.S. President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%.

China retaliated with 10%-15% hikes to import levies on some U.S. agri-food products, Canada put 25% tariffs on certain U.S. goods and Mexico promised to announce a riposte on Sunday.

Losses for Euronext wheat were moderate, however.

"U.S. goods are first in line for retaliatory moves," a futures dealer said. "But the market clearly looks oversold."

Chicago grains fell sharply as fears of restrictions on U.S. exports added to pressure from a bumper Brazilian soybean harvest and an expected rise in U.S. corn planting. GRA/

In Western Europe, traders are hoping for more demand, following talk of sales to Morocco last week, as Russian wheat becomes less competitive amid export restrictions.

Russian 11.5% protein wheat for March/April Black Sea shipment was on Tuesday around $240-$243 a ton FOB, about $1-$3 dearer than west EU prices. Russian 12.5% protein wheat was at about $247-$249, about $5-$7 above west EU levels.

But a sharp upward revision to Australia's wheat crop tempered sentiment.

"Russia's export quotas are slowing Russian shipments while the expected increase in Australia's crop could mean that Australian wheat could be the first choice of replacement for Russian wheat in some Asian and Middle Eastern markets," a German trader said.

EU soft wheat exports so far this season are down 37% from a year ago, EU data showed on Tuesday.

In rapeseed, May futures COMK5 settled 3.1% down at 511.00 euros, after falling to their lowest since January 30 at 507.50 euros.

Rapeseed tracked a slide in Canadian canola RSK5, as U.S. tariffs raised doubts about cross-border trade, and a fall in crude oil to a six-month low. O/R

($1 = 0.9492 euros)