Updates with European trading, changes dateline

PARIS/CANBERRA, May 12 (Reuters) - Chicago wheat rose for a third day on Tuesday after the condition of U.S. crops worsened unexpectedly and stalemate in U.S.-Iran peace talks raised the risk of longer-lasting disruption to fuel and fertiliser supplies from the Gulf.

Corn and soybean futures edged higher, underpinned by a jump in oil prices.

Grain traders were also awaiting direction from Tuesday's U.S. government crop forecasts for next season and this week's U.S.-China summit, at which agricultural trade will be a focus.

The U.S. Department of Agriculture (USDA) on Monday rated 28% of the U.S. winter wheat crop in good-to-excellent condition, down from 31% a week earlier and the lowest for this time of year since 2022.

Analysts had on average expected the good/excellent rating to improve slightly to 32%.

The figures reinforced doubts over whether recent showers have helped crops in drought-hit parts of the U.S. Plains.

"The dry weather in U.S. growing regions is causing concern, which has pushed up the U.S. wheat price by more than 10% since the beginning of April," Commerzbank analysts said.

The most traded wheat contract Wv1 on the Chicago Board of Trade (CBOT) was up 1.5% at $6.43-1/2 a bushel by 1047 GMT.

Kansas wheat futures KWv1, which represent the variety most affected by drought, were up 2% at $7.00 a bushel.

Oil prices extended gains after U.S. President Donald Trump said the ceasefire with Iran was "on life support". O/R

Grains have tended to track crude oil during the Iran war because corn and soyoil are widely used for biofuel. The conflict also threatens to weigh on farm production through higher fertiliser and energy costs.

"We are not going to see any resolution in Hormuz for a while. Supply issues will last for longer, and potentially into the Northern Hemisphere winter seeding period," Rabobank analyst Vitor Pistoia said of the Strait of Hormuz trade route that has effectively been closed by Iran.

World wheat and corn production next season will fall back from record highs while soybean output will hit a new peak, U.S. consultancy AgResource said on Tuesday.

CBOT corn Cv1 was up 0.2% at $4.76 a bushel and soybeans Sv1 added 0.3% at $12.16-1/4.

Grain traders are awaiting the USDA's first full global crop outlook for 2026/27, due at 1600 GMT.

Chinese purchases of U.S. agricultural goods are a priority for U.S. President Donald Trump's May 14-15 summit with Chinese President Xi Jinping, though traders and analysts said any deal could be limited by Beijing's unwillingness to go beyond a soybean purchase commitment made last October.

Prices at 1047 GMT
	Last	Change	Pct Move
CBOT wheat Wv1	643.50	9.50	1.50
CBOT corn Cv1	476.00	0.75	0.16
CBOT soy Sv1	1216.25	3.25	0.27
Paris wheat BL2c1	210.75	2.50	1.20
Paris maize EMAc1	213.50	0.75	0.35
Paris rapeseed COMc1	519.50	4.50	0.87
WTI crude oil CLc1	101.34	3.27	3.33
Euro/dollar EUR=	1.17	0.00	-0.31
Most active contracts - Wheat, corn and soy U.S. cents/bushel, Paris futures in euros per metric ton