GRAINS-Chicago corn falls, tracking weaker crude oil

BEIJING, March 20 (Reuters) - Chicago corn futures fell on Friday, tracking a drop in crude oil prices, while investors assessed the impact of the Middle East conflict on commodities markets.

Wheat edged lower while soybean gained.

The most-active corn contract on the Chicago Board of Trade (CBOT) Cv1 fell 0.4% to $4.67-3/4 a bushel, but was up 0.1% this week as of 0356 GMT.

CBOT wheat Wv1 lost 0.3% to $6.06-1/2 a bushel, down 1.2% so far this week.

Soybean Sv1 gained 0.1 at $11.70 a bushel. The oilseed fell 4.5% for the week.

Corn Cv1 fell 0.5% to $4.67-1/2 a bushel, and stayed unchanged so far this week.

Oil prices fell on Friday, as leading European nations and Japan offered to join efforts to secure safe passage for ships through the Strait of Hormuz and the U.S. outlined moves to boost oil supply. [O/R]

Corn often tracks moves in oil because the crop is a major feedstock for biofuel production.

"The likelihood of the war being short-lived as our base case assumes is receding and the risk of APAC economies encountering physical shortages of key commodities is rising," BMI said in a note, referring to the Iran crisis.

The International Grains Council on Thursday forecast a decline in global grains production in 2026/27, driven partly by an expected drop in U.S. output and heightened risks from the Middle East conflict.

The IGC projected world corn production would fall to 1.303 billion tons from 1.320 billion tons in 2025/26, while global wheat production would drop to 822 million tons from 845 million in the previous season.

Separately, China, the world's largest soybean importer, is expected to buy 108 million metric tons of U.S. soybeans in 2026, up 2 million metric tons from last year, the U.S. Department of Agriculture said on Friday.

The estimate reflected moderate growth in demand for soybean meal by China's feed industry, the USDA added.

Lower Chinese tariffs should revive imports of Canadian canola seed and meal, in turn weighing on demand for rival oilseed and meal imports, the agency said.