GRAINS-Chicago soy surges, tracking soyoil gains; wheat dips

BEIJING, March 3 (Reuters) - Chicago soybeans rose on Tuesday, supported by higher soyoil prices, which tracked gains in the crude oil market amid the ongoing war in the Middle East, while concerns over Chinese demand and competition from Brazil kept a lid on prices.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 added 0.37% to $11.68-1/4 a bushel by 0334 GMT. Soyoil BOcv1 gained 0.48% to 63.04 cents per pound.

"Soyoil markets continue to lift on the back of the surging crude oil markets owing to the conflict in the Middle East and closure of the Strait of Hormuz," said Sean Hickey, an analyst at Bendigo Bank Agribusiness.

Soyoil often tracks crude because it is used as a biofuel substitute for fossil fuels.

Despite these gains, a stronger U.S. dollar, doubt surrounding Chinese demand for U.S. soybeans, and the ongoing Brazilian harvest have kept prices in check, Hickey said.

Brazilian farmers had harvested 39% of their soy crop as of last Thursday, AgRural said, up 9 percentage points from the previous week but lagging the 50% reported a year earlier.

Consultancies AgRural and StoneX trimmed their forecasts for Brazil's 2025/26 soybean output on Monday, as yield losses caused by adverse weather in Rio Grande do Sul state weighed on overall production.

Meanwhile, CBOT wheat Cv1 dropped 0.09% to 5.76-3/4 a bushel, weighed by improving U.S. crop weather that alleviated concerns about stress on the winter wheat crop and a well-supplied global market.

Saudi Arabia's main state buying agency said it purchased about 794,000 metric tons of wheat in an international tender, exceeding the 655,000 tons it had sought earlier.

Corn Cv1 added 0.11% to 4.46-1/4 a bushel, supported by strong demand.

"Underlying export data for corn indicated demand is strong, which is supporting markets there," said Hickey.

Commodity funds were net sellers of CBOT corn, soybean, and wheat futures, traders said on Monday. CBOT/FUNDS