GRAINS-Wheat at new multi-month highs on Iran uncertainty

PARIS/JAKARTA, Feb 27 (Reuters) - U.S. and European wheat futures rose to fresh multi-month highs on Friday as investor concerns about the risk of a U.S.-Iran military conflict supported short-covering before the weekend.

Soybeans edged up to trade near a 20-month peak, with the oilseed also supported by expectations of more export and biofuel demand.

Commodities market have been unsettled as investors fret about inconclusive talks on Thursday between Washington and Tehran, despite mediator Oman's talk of progress. Other markets are taking cues from crude oil, which rose 2%. O/R

The most-active wheat contract Wv1 on the Chicago Board of Trade (CBOT) was up 1.8% at $5.84-3/4 a bushel. It earlier reached its highest since late June at $5.85-3/4, slightly above a previous eight-month top hit on Monday.

On Euronext, May wheat BL2K6 added 1.8% to 201.25 euros ($237.56) per metric ton, its highest since early November, after breaching the 200-euro chart resistance level.

News that China has advised its citizens to avoid Iran due to the security situation also unsettled markets, traders said.

"Uncertainty around the Iranian situation continues to generate a risk premium on prices," Argus Media analysts said.

"Geopolitics remains a key factor, with grain markets still sensitive to moves in oil."

Investors will sometimes reduce risky positions in advance of uncertain events over a weekend - such as short bets on a commodity. Wheat had already rallied last week as concerns over Iran and adverse weather had prompted short-covering.

Demand from importers this week has also lent support to the wheat market, though improving crop weather has capped gains. GRA/TEND

CBOT soybeans Sv1 added 0.4% to $11.68-1/4 a bushel to approach Thursday's peak of $11.72-3/4. CBOT corn was 0.6% up at $4.46 a bushel

A Reuters report on Thursday, which said the U.S. administration plans to require big oil refineries to make up for at least half of the biofuel blending exemptions, reinforced expectations that upcoming revisions to U.S. biofuel policy will boost demand for feedstocks like soyoil.

Traders are also watching to see if China extends purchases of U.S. soybeans after a Supreme Court ruling against some U.S. tariffs prompted President Donald Trump to introduce other levies.

Brazil, which is reaping a record soy crop this year, may increase exports of the oilseed to China in 2026 amid lower Argentine shipments and despite stronger competition from U.S. farmers, Hedgepoint Global Markets said on Thursday.

($1 = 0.8472 euros)