EU wheat pauses after rally, war and weather in focus

PARIS, June 20 (Reuters) - Euronext wheat edged down from a one-month high on Friday as investor worries over U.S. intervention in Israel's war with Iran abated and traders assessed mixed weather for crops.

September wheat BL2U5 on Euronext settled 0.5% lower at 208 euros ($239.91) a metric ton. It earlier rose to its highest since May 21 at 210.50 euros, surpassing a previous one-month top from Thursday.

Chicago wheat Wv1 also ticked down. U.S. prices had surged on Wednesday, when the run-up to a U.S. holiday on Thursday drove investors to cover short positions amid crop weather worries and uncertainty over U.S. action against Iran. GRA/

The White House's delay to a decision on U.S. involvement in the conflict eased market jitters and sent crude oil LCOc1 lower on Friday.

"The conflict clearly forced funds to cover some of their shorts," a futures dealer said. "It's difficult to judge the risk on this."

Traders were monitoring any war effects on grain activity in Iran.

No additional purchase interest from Iran was seen this week but, with the local harvest in progress, the country's import requirements may be limited in the near term.

“Dry weather is expected to reduce Iran’s summer 2025 crop though it will still be enough to cover immediate needs,” one German trader said.

“But sellers are also concerned about offering to Iran until there is more clarity about the conflict and its impact on Iran’s foreign currency availability.”

This week's short-covering in wheat was also stoked by worries about drought in parts of Russia, heavy rain in the U.S. Plains and a heatwave set to exacerbate a dry spell in France.

But a Russian government estimate that the country's crop will be higher than last year tempered concern.

In France, temperatures should peak by the end of the week in the mid- to high-30s Celsius.

"It's not ideal but wheat should be okay. The grains have been filled and this should ripen the crop," the dealer said.

The heat was seen as more of a risk for spring barley. But it should help winter barley harvesting, which started last week, according to farm office FranceAgriMer.

In exports, Egypt's state grain buyer confirmed recent purchases of French wheat would start to load from this weekend.

However, traders said export prospects for the upcoming season were weak, with French wheat estimated to be around $20 a ton dearer than Black Sea supplies for July shipment to Egypt.

($1 = 0.8670 euros)