PARIS/HAMBURG, June 10 (Reuters) - Euronext wheat rose for a second session on Wednesday, extending a technical bounce from a 3-1/2 month low with support from rebounding U.S. futures.

September milling wheat BL2U6 on Paris-based Euronext settled up 0.7% at €203.25 ($234.94) a metric ton.

The contract earlier reached a one-week high at €204.25, moving further away from a low of €199.50 touched in each of the past two sessions.

Broadly favourable weather for crops and the start of northern hemisphere harvesting have pressured prices this month.

But chart support at €200 and a pause in investment fund selling have helped Euronext to steady this week, traders said.

Financial investors, who had built up large long positions in grains earlier in the Iran war, switched to a net short position in Euronext wheat last week, exchange data showed on Wednesday.

Chicago wheat Wv1 rose for a third day as it recovered from a two-month low. GRA/

"Euronext has held the €200 level convincingly so far this week, which is good for farmers but disappointing for export prospects at a time the west EU was looking more competitive in export markets," one German trader said.

Traders are watching to see if buyers decide to step up purchases as renewed strikes in the Iran conflict made prospects for a U.S.-Iran peace deal uncertain.

"Importers are still buying hand-to-mouth in the hope any Iran peace deal will depress prices, but they cannot stop buying for months and months, so some demand is visible."

Algerian buyers were seeking about 30,000 tons of 11.5% protein wheat at around $270 a ton cost and freight included (c&f) for September shipment.

One Egyptian buyer was seeking about 30,000 tons of 11.5% Russian/Ukrainian wheat at about $253 a ton c&f for June/July shipment, while another Egyptian buyer sought about 30,000 tons of Russian or EU 12.5% wheat at $255 a ton c&f for June/July shipment.

Coceral has increased its forecast of soft wheat production in the European Union and Britain this year, the grain trade association said, citing good conditions in southeast Europe and Germany, as well as expectations that a recent heatwave has not hit yields in France.

Traders were monitoring a hot, dry spell forecast in France from the end of this week, though latest charts suggested temperature highs would be well below peaks seen during last month's heatwave.

($1 = 0.8651 euros)