GRAINS-Soybeans hit contract high on crude oil rally as war worries grow

By Heather Schlitz

CHICAGO, March 6 (Reuters) - Chicago soybeans rose on Friday to their highest since June 2024, tracking further gains in crude oil prices as investors continued to react to potential disruption from the U.S.-Israeli war with Iran.

Wheat rose sharply to approach a one-year high, with fear about an escalating Middle East conflict fuelling short-covering ahead of the weekend. Corn was also higher, with new-crop corn contracts hitting lifetime highs.

The most-active soybean contract on the Chicago Board of Trade Sv1 rose 21-1/2 cents to $12.00-3/4 per bushel after earlier setting a contract high of $12.02-3/4 per bushel, its highest since June 6, 2024. All soyoil contracts hit lifetime highs as crude oil rallied.

"In soybeans, it's the crude rally supporting bean oil, and that's the leadership market for the soy complex right now," said Randy Place, analyst at Hightower Report.

Comments by Qatar's energy minister, who said if the war continues he expects all Gulf energy producers to shut down exports within weeks and drive oil prices to $150 a barrel, further unsettled investors.

Grain markets can track movements in crude oil, partly due to investment flows from commodity funds and also because crops like soybeans and corn are widely used for making biofuel.

Brazil's farmers are in the middle of harvesting what is widely forecast to be a record crop that could slow Chinese demand for U.S. soybeans.

CBOT wheat Wv1 settled 33 cents higher to $6.16-3/4 per bushel. CBOT corn Cv1 closed 7 cents higher to $4.60-1/2 a bushel.

The Middle East conflict has taken attention away from beneficial rain in some U.S. winter wheat belts, which could help bolster already comfortable global supply.

The war has also offset strength in the dollar =USD, which tends to curb Chicago prices as it makes U.S. crops more expensive for export. FRX/