EU wheat and rapeseed slip further as euro and tariffs weigh

PARIS, March 5 (Reuters) - Euronext wheat fell on Wednesday to another six-month low while rapeseed dropped to a three-month low, pressured by a jump in the euro and uncertainty over fallout from U.S. tariffs.

May wheat BL2K5 on Euronext settled 0.2% lower at 223.00 euros ($240.42) a metric ton.

It earlier dropped to 220.50 euros, its lowest since August 28 and below a previous six-month low from Tuesday.

Euronext wheat pared losses in late trading as expectations grew that Washington will on Wednesday announce tariff relief for certain imports from Canada and Mexico.

The potential relief, flagged by U.S. Commerce Secretary Howard Lutnick following Tuesday's implementation of 25% tariffs on the two countries, supported a bounce in Chicago grains. GRA/

Investors remained wary, however, of a drag on growth from tit-for-tat tariffs.

“Overall, I think markets have decided that the U.S. tariffs are going to be bad for demand,” a German trader said.

The euro EUR=, which continued its surge against the dollar to a four-month peak, also weighed on Euronext.

Export prospects for EU wheat have nonetheless improved as Russian supplies have become less competitive.

"Black Sea export prices are now above west EU levels, but unfortunately U.S. wheat is also starting to look attractive including to North African buyers,” one German trader said.

Traders reported moderate purchases by Moroccan buyers in Germany and other north European countries this week, largely for April shipment, adding to sales of EU wheat to Morocco last week.

But there was talk that imports of feed grains like barley by Morocco may slow as rainfall in the drought-hit country is helping pastures recover.

Traders assessed U.S. hard red winter FOB prices at about the same or just under German/Baltic levels but U.S. soft red winter for Gulf shipment well below Russia and the EU.

In France, a mild, sunny spell this week was seen as favourable for crops but there was still concern after heavy rain in recent months.

"The soil remains waterlogged, preventing proper absorption of the rain. As a result, many hectares of wheat will be lost, requiring significant replanting," Eric Thirouin, head of wheat producers group AGPB, said.

In oilseeds, May rapeseed COMK5 on Euronext settled 2.2% lower at 499.50 euros, after hitting the lowest since November 28 at 498.25 euros.

The euro's strength and losses in crude oil outweighed support from a bounce in Canadian canola and U.S. soybeans. O/R

($1 = 0.9276 euros)