Recasts, adds quote in paragraph 5, updates prices

By Sybille de La Hamaide and Naveen Thukral

PARIS/SINGAPORE, May 7 (Reuters) - Chicago grain futures fell on Thursday, in line with a sharp fall in crude prices, on hopes of a potential truce between the U.S. and Iran , while forecasts of rain in parched U.S. areas added further pressure on wheat.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 lost 0.8% to $6.12-1/2 a bushel, as of 0915 GMT. Soybeans Sv1 slipped 0.2% to $ 11.92-3/4 a bushel and corn Cv1 fell 0.5% to $4.66-1/4 a bushel.

Soybeans slid to their lowest since April 28 while corn hit its weakest since April 27.

Oil prices slid around 2% to below $100 a barrel on renewed hopes for a U.S.-Iran peace deal that could gradually ease supply disruptions caused by the closure of the Strait of Hormuz. O/R

"If the weakness in energy continues, grains may still have more downside ahead," CM Navigator analyst Donatas Jankauskas said.

Tehran said it was reviewing Washington's peace proposal that sources said would formally end the war while leaving unresolved the key U.S. demands that Iran suspend its nuclear programme and reopen the Strait of Hormuz.

The war has driven fluctuations in oil prices, strongly influencing agricultural markets, as corn and soybean oils are widely used for the production of alternative fuels.

Meanwhile, rain is forecast to hit dry U.S. wheat zones this week, although traders said precipitation may come too late to save the crop in some areas.

The U.S. Department of Agriculture's weekly report said 31% of the nation's winter wheat crop was in good to excellent condition, up from 30% last week but still the lowest for this time of the year since 2023.

Algeria's state grains agency OAIC has bought around 390,000 to 420,000 metric tons of milling wheat in an international tender which closed on Wednesday, European traders said.

Prices at 0915 GMT
	Last	Change	Pct Move
CBOT wheat Wv1	612.50	-4.75	-0.77
CBOT corn Cv1	466.25	-2.25	-0.48
CBOT soy Sv1	1192.75	-2.00	-0.17
Paris wheat BL2U6	207.00	-0.50	-0.24
Paris maize EMAc1	216.25	-1.50	-0.69
Paris rapeseed COMc1	514.75	-2.00	-0.39
Euro/dlr EUR=	1.18	0.00	0.17
Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne