GRAINS-US grain, soy futures rise as oil rallies

By Tom Polansek

CHICAGO, May 11 (Reuters) - U.S. grain and soybean futures rose on Monday, supported by spiking oil prices after the United States and Iran failed to reach a deal to end their war, analysts said.

Oil prices climbed by more than 3% after U.S. President Donald Trump said the ceasefire with Iran was "on life support," leaving the Strait of Hormuz largely closed with no clear end in sight to the conflict.

The Middle East is a leading fertilizer production hub, and much of the global fertilizer trade typically passes through the strait.

"As long as you keep that strait closed, the harder it is going to be globally to get fertilizer," said Jim Gerlach, president of brokerage A/C Trading in Indiana. "It becomes inflationary because of high-priced energy and high-priced food. All of that draws fund money."

Chicago Board of Trade most-active soybean futures Sv1 were up 5-3/4 cents at $12.13-3/4 a bushel by 12:20 CDT (1720 GMT). Corn Cv1 advanced 3-3/4 cents to $4.75 a bushel, while wheat Wv1 jumped 13-1/2 cents to $6.32-1/2 a bushel.

Traders were monitoring the weather in drought-hit U.S. wheat belts, where rainfall missed some critically dry areas last week and may have arrived too late or in insufficient amounts to prevent crop damage.

Traders were also waiting for the U.S. Department of Agriculture to release condition ratings for the U.S. winter wheat crop and data on U.S. corn and soy planting progress on Monday. On Tuesday, USDA is set to release data on global grain supplies and demand.

China, the world's biggest soybean importer, could agree to purchases of U.S. agricultural products during Trump's visit to China between May 14 and 15, analysts said. Some said they expected China to make a small "goodwill" purchase of U.S. soybeans before the summit.

"We've got a full plate this week," Gerlach said.