GRAINS-Soybeans rally on surging crude oil, strong crushing pace

By Heather Schlitz

CHICAGO, May 4 (Reuters) - Chicago Board of Trade soybean futures climbed to a seven-week peak on a continuous chart on Monday on rising crude oil prices and strong demand from soybean crushing plants as tensions in the Middle East persisted.

Corn also inched higher on stronger crude oil prices, while also gaining support from the risk of rain delaying U.S. spring planting.

Wheat seesawed as forecasts predicted rain will reach the parched U.S. wheat belt, though the showers may come too late for areas where the drought has already done irreversible damage to the winter wheat crop.

"They're saying again there are a couple chances for rains in areas that need it, but the question that it begs is - is it too late?" said Jim Gerlach, president of A/C Trading.

CBOT soybeans Sv1 added 17-3/4 cents to hit $12.20-3/4 per bushel as of 11 a.m. CDT (1600 GMT). CBOT corn Cv1 ticked up 3-1/2 cents to $4.84 per bushel, and wheat Wv1 inched up 1-1/4 cents to $6.39 per bushel.

Most-active wheat futures Wv1 struck a nearly two-year peak on a continuous chart last Wednesday as persistent drought and a cold spell maintained fears of yield losses in the U.S. hard red winter wheat crop.

Traders will receive an update on field conditions from a weekly U.S. Department of Agriculture crop report that will be released after the close of trade on Monday.

Traders will also assess the USDA crop report for planting progress. Some farmers in the central and eastern U.S. grain belt have yet to begin planting corn and soybeans due to wet, cold conditions.

Strength in crude oil during the U.S.-Israeli conflict with Iran has supported grain prices as corn and soybeans are common feedstocks for biofuel.

Oil prices rose 4% on Monday on worries over supply disruptions due to renewed Gulf tensions, including a United Arab Emirates notice that its air-defense systems were responding to a missile threat and a fire on a South Korean vessel. O/R