GRAINS-Chicago soybeans gain as crude oil surges amid Middle East conflict

By Sybille de La Hamaide and Ella Cao

BEIJING/PARIS, 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 rose 1.6% to $11.82 a bushel by 1050 GMT. Soyoil BOcv1 was also up 1.6% at 63.74 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.

Brent crude LCOc1 rose more than $3 on Tuesday for a third day of gains as the widening Gulf conflict and threats to shipping in the Strait of Hormuz heightened fears of supply disruptions from the key energy producing region.

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 rose 1.2% to 5.84 a bushel. The rise on global markets and concerns about stress on the winter wheat crop offset signs of improving U.S. crop weather.

European crop monitor MARS said on Monday that winter crop conditions in Europe were mostly satisfactory, although severe and persistent frost in parts of northern and eastern Europe has heightened concerns about local frost damage. Winter wheat is generally well hardened, but barley and rapeseed may have been adversely affected, it said.

Corn Cv1 rose 1.1% to 4.50-3/4 a bushel, also 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