*

Chicago soybeans rise on surging oil prices but biofuel

worries

cap gains

*

Wheat rebounds from 4-week low, corn eases to hold near

6-month

low

*

Grain markets shrug off USDA report, focus on ample supply

and

tepid demand

(Updates with European trading, changes byline/dateline)

By Ella Cao and Gus Trompiz

BEIJING/PARIS, June 13 (Reuters) - Chicago soybeans

ticked up on Friday on the back of a jump in crude oil prices

after Israel conducted strikes on Iran, though the oilseed

market remained capped by uncertainty over U.S. biofuel targets

and expectations of abundant global supply.

Wheat edged higher to recover from an earlier four-week low,

while corn eased to move back towards a six-month low from last

week.

Favourable crop prospects continued to hang over grain

markets, with relatively benign weather in the U.S. Midwest and

the onset of wheat harvesting in the Northern Hemisphere.

The most-active soybean contract on the Chicago Board of

Trade (CBOT) was up 0.2% at $10.44-3/4 per bushel,

rebounding from a one-week low on Thursday. CBOT soyoil

added 1.3%.

Oil prices jumped nearly 9%, hitting their highest in months

after Israel said it struck nuclear and military sites in Iran,

dramatically escalating tensions in the Middle East and raising

worries about disrupted oil supplies.

"Rising crude oil prices lifted soyoil prices by making

biodiesel more attractive, boosting demand for soyoil as a key

biofuel ingredient," said Johnny Xiang, founder of Beijing-based

AgRadar Consulting.

That brought relief for the soybean complex after renewed

concern on Thursday about U.S. biofuel policy.

The U.S. Environmental Protection Agency (EPA) on Friday is

expected to propose lower than-anticipated biofuel blending

mandates, four sources told Reuters.

ADM, a key U.S. soybean crusher and biofuel

producer, cut bids for soybeans this week ahead of the EPA

announcement.

CBOT corn shed 0.7% to $4.35-1/2 a bushel.

The market shrugged off a tighter stocks forecast for U.S. corn

in a monthly U.S. Department of Agriculture report on Thursday,

which was broadly expected following brisk recent exports.

Supply pressure has built in corn and soybeans amid

favourable growing weather in the U.S. Midwest and as Brazil

begins harvesting what is expected to be a bumper second corn

crop following a record soybean harvest.

CBOT wheat was up 0.8% at $5.30-1/2 a bushel.

The wheat market is facing seasonal harvest pressure in the

Northern Hemisphere, where large crops are anticipated in the

United States, Europe and Russia, despite mixed weather in

recent months.

"The groundwork for higher prices is there but the time

frame is months rather than weeks, and before that can happen,

we have to go through North Hemisphere harvest pressure," said

Ole Houe, head of advisory services at IKON Commodities in

Sydney.

Prices at 1051 GMT

Last Change Pct Move

CBOT wheat 530.50 4.00 0.76

CBOT corn 435.50 -3.00 -0.68

CBOT soy 1044.75 2.50 0.24

Paris wheat 200.25 1.50 0.75

Paris maize 186.75 1.00 0.54

Paris rapeseed 489.00 6.75 1.40

WTI crude oil 73.83 5.79 8.51

Euro/dlr 1.15 -0.01 -0.75

Most active contracts - Wheat, corn and soy US

cents/bushel, Paris futures in euros per metric ton