CHICAGO, April 19 (Reuters) - U.S. corn and soybean prices rose on Friday as heightened geopolitical tensions spurred a round of bargain buying after the benchmark contracts in both markets fell to their lowest levels in more than six weeks, traders said.
Corn futures drew additional support from news that the U.S. Environmental Protection Agency will temporarily expand sales of higher-ethanol blends of gasoline this summer.
Chicago Board of Trade July corn settled up 6-3/4 cents at $4.43 per bushel. July soybeans ended up 16-3/4 cents at $11.65-3/4 a bushel, rallying after a dip to $11.45-3/4, the contract's lowest level since Feb. 29. CBOT July wheat finished up 13-3/4 cents at $5.66-3/4 a bushel.
Analysts said traders were squaring positions ahead of the weekend and after recent declines. Despite Friday's higher close, July corn finished the week down 0.95%, July soybeans declined 1.8% and July wheat fell 0.7%.
Corn drew strength from an announcement by the EPA that it would widen the summertime sales period for gasoline containing higher blends of corn-based ethanol in an effort to reduce potential supply disruptions amid ongoing conflicts in Ukraine and the Middle East.
The move "is not going to cause a big increase in ethanol demand. Rather, it will avoid a seasonal dip in demand. Its market impact is more psychological," StoneX chief commodities economist Arlan Suderman wrote in a client note.
Reports of Israeli missile strikes in Iran overnight fueled fears of an escalating conflict in the Middle East, and pushed wheat prices up 4% after the first reports of the strike emerged. Traders had feared that expanding violence in the region could impact shipments in the region and from Russia, the world's biggest wheat exporter and an ally of Iran.
But Tehran played down the incident and indicated it had no plans for retaliation.
Crude oil prices also pared gains after having surged amid concerns that Middle East oil supply could be disrupted.
Rallies in soybeans were capped in part by supplies of cooking oil coming into the United States from overseas and depressing the soyoil market, said Don Roose, president of Iowa-based U.S. Commodities. CBOT July soyoil futures hit a contract low in early moves before bouncing.
(Reporting by Renee Hickman in Chicago Additional reporting by Peter Hobson in Canberra and Sybille de La Hamaide in Paris, Editing by Louise Heavens and Matthew Lewis)
