GRAINS-Wheat and corn rise as Middle East fighting sparks safe-haven buying

HAMBURG, March 2 (Reuters) - Chicago wheat and corn rose on Monday as the outbreak of military conflict in the Middle East sparked safe-haven demand, with a surge in crude oil rates also providing support to grain prices.

Soybeans, meanwhile, fell on weak market fundamentals.

Chicago Board of Trade's most-active wheat Wv1 rose 0.8% to $5.96 a bushel at 1145 GMT. Corn CK26 rose 0.1% to $4.49 a bushel, while soybeans SK26 fell 0.1% to $11.68-1/2 a bushel.

Oil prices surged, the dollar jumped and shares slid on Monday as military conflict in the Middle East looked set to last for weeks.

“There seems to be some safe-haven interest in grains today because of the Middle East fighting as crude oil rises,” said Matt Ammermann, commodity risk manager at StoneX. “Buying of wheat and corn seems to be based on the fear factor of the impact of the war.”

“But grains price rises are moderate today, and the rise in crude oil is also rather moderate considering the drama in the Middle East. It looks like some investors could be buying grains as equities fall,” he added.

Dealers were also watching for signs that grains consumers were increasing supply purchases.

Saudi Arabia's state buying agency on Monday purchased 794,000 tons of wheat in a tender, above the 655,000 tons sought.

"The purchase is only slightly higher than the volume sought in the tender, with the conflict in the Middle East possibly playing a role," a European trader said. "But the moderate increase would seem to indicate there is not much initial concern about the medium-term impact of the fighting on supplies."

Ammermann, meanwhile, said that soybean markets were bearish as China was not buying U.S. soybeans and South American crop weather remained non-threatening.

“China has also condemned the attacks on Iran by the U.S. and Israel, and any deterioration in U.S.-China relations could also threaten future Chinese buying of U.S. soybeans," he said.