Paris wheat consolidates after two-week high

PARIS, April 8 (Reuters) - Euronext wheat consolidated below a two-week high on Tuesday, with prices curbed by a stronger euro but underpinned by easing tariff jitters and short-covering by some participants, traders and analysts said.

May wheat BL2K5 on the Paris-based Euronext exchange settled unchanged on the day at 224.75 euros ($245.40) a metric ton.

The contract earlier rose to 226.25 euros, its highest since March 21 and just above a previous two-week peak from Monday, before paring gains.

A selloff in financial markets abated on Tuesday, with investors watching to see if negotiations may avert some U.S. tariffs. The dollar also fell, helping Chicago grain futures edge up. GRA/

The firmer euro EUR=, which makes European wheat dearer overseas, weighed on Euronext, but the market again showed little downward impetus.

"Agriculture is holding relatively well because of funds' positioning," Andrey Sizov, head of consultancy Sovecon, said. "They are short at the moment in all major crops except corn, with a huge short in wheat."

European traders were assessing the potential impact of the European Union's proposed 25% counter-tariffs on certain U.S. goods, including maize and soybeans, though reaction was muted with the timeline seen leaving scope for negotiations.

Traders are also monitoring end-of-season EU wheat exports, with greater optimism about France's prospects after rumours of a sale to Egypt and moves to ease diplomatic tensions with Algeria.

EU soft wheat exports were down 34% from a year ago, data showed on Tuesday.

Dry weather in northwestern Europe was also in focus as crops entered crucial spring growth phases while low river levels on the Rhine were hampering transport.

“March was very dry which helped farmers get spring plantings finished. Rain is now needed in the next couple of weeks otherwise concern about dryness stress will increase,” a German trader said.

Showers are forecast for next week in much of France and Germany, which coupled with recent rain relief in parched areas of the Black Sea zone could keep a lid on wheat prices.

($1 = 0.9158 euros)