Euronext wheat retreats from six-month high

PARIS, March 4 (Reuters) - Benchmark wheat futures on Euronext fell nearly 2% on Wednesday, retreating from a six-month peak amid investors hopes of de-escalation in the Middle East war.

May milling wheat BL2K6, the most-active position on Euronext, settled 1.9% down at 199.50 euros per metric ton to pass back below the psychological 200-euro threshold.

The contract on Tuesday struck its highest since September 2 at 205.00 euros as market reaction to the conflict between Iran and allies the United States and Israel pushed the euro EUR= lower and prompted more short-covering in wheat. GRA/EU

A weaker euro makes European grain more competitive in dollar-priced international grain markets.

But a New York Times report, which said operatives from Iran's Ministry of Intelligence reached out indirectly to the CIA with an offer to discuss ending the conflict, encouraged markets to steady on Wednesday, with the dollar falling back against other currencies including the euro. FRX/

"The euro-dollar rate is clearly stabilising and you've got a move to sell back grains," a futures dealer said.

Chicago wheat Wv1 also fell, despite the easing dollar, as rain forecast for some U.S. winter wheat zones shifted attention back to ample supply prospects. GRA/

Financial investors had switched to a net long position in Euronext wheat last week, data on Wednesday showed.

In export markets, traders noted continued strong demand from private buyers in Egypt, though with cheaper Black Sea supplies sought.

One Egyptian buyer was on Wednesday seeking 30,000 tons of 11.5% protein Black Sea wheat at about $253 a ton, cost and freight included, for April shipment to Egypt.