GRAINS-Chicago grains rise alongside crude oil with focus on Iran conflict

By Heather Schlitz

CHICAGO, March 5 (Reuters) - Chicago grain and soybean futures lifted on Thursday, supported by higher crude oil prices as the conflict in the Middle East continued to disrupt supply, traders and analysts said.

However, ample global crop supply and strength in the dollar remained curbs on grain prices.

The most-active soybean contract on the Chicago Board of Trade Sv1 was up 6-3/4 cents to $11.76-1/2 per bushel as of 10:50 a.m. CT (1650 GMT).

CBOT wheat Wv1 added 12 cents to $5.80-1/4 a bushel and CBOT corn Cv1 gained 6-1/4 cents to $4.50-1/4 a bushel.

Chicago prices had edged down on Wednesday as investor hopes for a short conflict steadied oil prices and lifted stock markets.

But crude oil rose sharply on Thursday as the ongoing closure of the Strait of Hormuz continued to disrupt Middle East supply and led some refineries in other parts of the world to cut output. O/R

Grain markets can react to movements in crude oil, partly because biofuel absorbs large amounts of soybean and corn as feedstocks.

A parallel rally in the dollar, which has attracted safe-haven demand from investors during the Iran conflict, was acting as a brake on U.S. grains.

Jitters over the war had helped push grain and soybeans to multi-month highs at the start of the week, but supply and demand fundamentals remained a cap.

Brazil is harvesting what is widely expected to be a record soybean crop that could stall Chinese demand for U.S. beans.

Rains in some U.S. winter wheat belts, meanwhile, are boosting production prospects as crops emerge from dormancy.

Broad-based fund buying of wheat and other agricultural commodities as a hedge against inflation has also boosted prices, said Jim Gerlach, president of A/C Trading.

Brisk exports have underpinned the corn market. The U.S. Department of Agriculture on Wednesday confirmed sales of 196,000 metric tons of corn for shipment to unknown destinations.