GRAINS-US grain, soy futures rise as oil rallies

By Tom Polansek

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

Oil prices climbed 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 July soybean futures SN26 rose 5 cents to $12.13 per bushel, while July corn futures CN26 ended 4 cents higher at $4.75-1/4 per bushel.

CBOT July wheat WN26 climbed 15 cents to $6.34 per bushel as traders worried about crop damage in drought-hit U.S. wheat belts.

After trading ended, the U.S. Department of Agriculture said 28% of the nation's winter wheat crop was in good or excellent condition as of Sunday, down from 31% a week earlier. Analysts surveyed by Reuters had expected an improvement to 32%.

The agency said in a weekly report that farmers had planted 57% of the U.S. corn crop and 49% of soybeans.

On Tuesday, USDA is set to release global agricultural supply and demand estimates.

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

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