GRAINS-Chicago soyoil futures hit 18-month high on biofuel mandate, Mideast tensions

BEIJING, June 16 (Reuters) - Chicago soyoil futures surged to their highest level in nearly 18 months, buoyed by higher-than-expected biofuel blending proposals and a rally in crude oil prices amid escalating conflict between Israel and Iran.

The most-active soyoil contract BOcv1 on the Chicago Board of Trade jumped 4.58% at 52.93 cents per pound, as of 0134 GMT, its highest since December 20, 2023.

Soyoil, a key feedstock for biodiesel fuel, gained support after the U.S. Environmental Protection Agency proposed last Friday to increase the amount of biofuels that oil refiners must blend into the nation's fuel mix over the next two years. The proposal exceeded trade expectations.

Rising crude oil prices also lifted soyoil, as higher energy costs typically make biodiesel more competitive.

Oil extended Friday's rally, as renewed strikes by Israel and Iran over the weekend increased concerns that the battle could widen across the region and significantly disrupt oil exports from the Middle East.

Soybean Sv1 fell 0.26% to $10.67 per bushel, retreating from a three-week high hit last Friday. Weak demand, abundant global supplies and continued tariff uncertainty remain a drag on prices.

Wheat Wv1 dipped 0.74% to $5.39-6/8 a bushel amid seasonal pressure as the Northern Hemisphere's winter wheat harvest gets underway.

Corn Cv1 dropped 0.45% to $4.42-4/8 a bushel, weighed down by favourable weather forecasts for crop development in the U.S. corn belt.

Traders are awaiting updated weekly crop ratings due later on Monday from the U.S. Department of Agriculture.

Commodity funds were net buyers of CBOT soyoil, soybean, wheat and corn futures contracts on Friday and net sellers of soymeal futures, traders said.