Wheat near 2-week high as short-covering, Middle East tensions support

* Wheat prices edge higher on Middle East conflict

* Chicago wheat futures vulnerable to short-covering

* China's soybean imports from U.S. halve in March

SINGAPORE, April 22 (Reuters) - Chicago wheat firmed on Monday, hovering close to a two-week high hit in the previous session and rising for a third consecutive session as short-covering and geopolitical tensions underpinned prices.

Corn and soybeans ticked lower.

"Tensions in the Middle East have eased from what we saw on Friday but the threat remains," said one Singapore-based trader. "The conflict could impact crude prices, which could spill into other commodities. Rally in crude could also increase freight prices."

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.1% at $5.67-1/4 a bushel, as of 0328 GMT, having gained 2.5% on Friday. The market climbed to its highest since April 5 in the previous session.

Corn lost 0.3% to $4.32-1/4 a bushel, while soybeans gave up 0.4% to $11.61 a bushel.

Reports of Israeli missile strikes in Iran on Friday fuelled fears of an escalating conflict in the Middle East, although Tehran played down the incident.

Traders had feared that expanding violence could impact shipments in the region and from Russia, the world's biggest wheat exporter and an ally of Iran.

The U.S. House of Representatives on Saturday, with broad bipartisan support, passed a $95 billion legislative package providing security assistance to Ukraine, Israel and Taiwan, over bitter objections from Republican hardliners.

Funds are holding large short positions in Chicago grain and oilseed futures, leaving the market prone to short-covering.

Commodity funds were net buyers of CBOT soybean, corn, wheat, soymeal and soyoil futures contracts on Friday, traders said.

In the week of April 16, large speculators increased their net short position in corn futures, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and soybeans.

On the fundamental front, China's soybean imports from the United States fell by half in March from a year earlier and corn exports also plummeted, as buyers favour more competitive supplies from Brazil's hefty harvest, data showed on Saturday.

Russia's government said on Saturday it has introduced an additional quota of 5 million tons for exports of wheat, meslin, rye, barley and corn outside the Moscow-led Eurasian Economic Union until June 30 to support local producers.

The main export quota of 24 million tons had been set for Feb. 15 until June 30. (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips and Eileen Soreng)