EU wheat hovers near 6-month low as euro offsets US rebound

PARIS, March 6 (Reuters) - Euronext wheat steadied on Thursday after a six-month low as a rebound in Chicago grains spurred by a loosening of U.S. tariffs countered pressure from a rising euro.

May wheat BL2K5 on Euronext settled 0.1% down at 222.75 euros ($240.61) a metric ton.

The earlier dropped to 219.50 euros, its lowest since late August and below a previous six-month low from Wednesday.

Euronext wheat pared losses in late trading, with deferred contracts closing slightly up, after U.S. President Donald Trump confirmed broad relief from tariffs for Mexican goods until April 2.

The news supported a second day of gains for Chicago grains after multi-month lows on Tuesday. GRA/

"There's the U.S. rebound with the Mexico announcement by Trump and the weak dollar," a futures dealer said.

The easing of tariffs against Canada and Mexico, which started with relief for the auto sector announced on Wednesday, has reassured investors fearful of disruption to trade, including U.S. agricultural exports.

However, the euro EUR=, which extended its rally against the dollar to a four-month peak, remained a curb on Euronext prices. FRX/

"The stronger trend in the euro continues to provide headwinds for European prices at a time of thin demand from the main Middle Eastern importers during the Ramadan period," one German trader said.

Russian 11.5% protein wheat for March/April Black Sea shipment was on Thursday around $238-$242 a ton FOB and Russian 12.5% at $245-$249, close to or just under the west EU depending on Euronext variations, traders said.

Traders assessed U.S. hard red winter FOB prices at about $235-$237 a ton depending on latest Chicago levels.

A recent rise in Russian prices amid tightening supply had bolstered EU export hopes after a slow season so far.

But Russian wheat export shipments looked sizeable in February with market estimates of around 1.8-2.0 million tons shipped, the trader said.

This included a hefty flow of almost 900,000 tons of Russian wheat shipped to Egypt in February despite a shakeup in Egypt’s state purchasing system.

The market was also monitoring crop conditions as northern hemisphere wheat emerges from winter.

There was background concern about dryness in eastern Europe and parts of Russia and Ukraine, as well as uncertainty over potential loss of wheat area in France after months of soggy conditions, traders said.

($1 = 0.9258 euros)