GRAINS-Grain prices gain as oil shoots higher on Middle East war

BEIJING/HAMBURG, March 9 (Reuters) - Global grains prices rose on Monday, with soy and wheat hitting almost two-year peaks as the U.S.-Israel war on Iran sent crude oil soaring and halted Gulf shipping.

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

Chicago Board of Trade most-active soybeans Sv1 were up 0.7% to $12.08-1/4 a bushel at 1347 GMT after hitting their highest since May 2024, partly driven by soyoil prices BOcv1 which hit their highest since December 2022.

Wheat Wv1 was down 0.6% to $6.13-1/4 a bushel after earlier hitting its highest since June 2024. Corn Cv1 was flat at $4.60-1/2 a bushel after earlier hitting 10-month highs.

"The war risk factor continues to support wheat, corn and soybean markets," said Matt Ammermann, commodity risk manager at StoneX. He noted that while market fundamentals may be bearish, especially in soybeans and wheat, the impact of the war is overriding this.

Oil prices surged to their highest since mid-2022, with the Gulf's Strait of Hormuz remaining virtually shut, meaning countries around the world are cut off from a fifth of global oil and liquefied natural gas supplies.

The Middle East conflict has offset strength in the dollar =USD, which tends to curb grains prices as it makes dollar-based grains more expensive for export.

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

"There are still very large wheat supplies, especially in the Black Sea region, and also in the west EU, seeking buyers," one German trader said.

He added, however, that import demand is slack as buyers are delaying purchases in hopes of an Iran war truce.