CANBERRA, April 19 (Reuters) - Chicago wheat futures rose more than 2% on Friday while soybeans and corn also gained after reports of Israeli missile strikes in Iran fuelled fears of an escalating conflict in the Middle East and lifted oil prices.

Still, all three contracts were hovering close to their lowest levels since 2020 amid plentiful supply.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 2.1% at $5.64-1/4 a bushel, as of 0445 GMT, having risen nearly 4% after the first reports of the strike emerged.

CBOT corn was 0.9% higher at $4.40 a bushel and soybeans were up 0.4% at $11.54 a bushel.

Oil prices surged more than 4% amid concerns that Middle East oil supply could be disrupted before easing back to a gain of around 2%. Gold prices rose, while Asian shares and bond yields sank.

Traders feared that expanding violence in the Middle East could impact shipments in the region and from Russia, the world's biggest wheat exporter and an ally of Iran, said Commonwealth Bank analyst Dennis Voznesenski.

Higher oil prices exert upward pressure on ethanol and its feedstocks, which include corn and soybeans, Voznesenski said.

Israel had promised to retaliate after Iran last weekend launched hundreds of drones and missiles on Israel. That attack was a response to a suspected Israeli strike on Iran's embassy compound in Syria.

While wheat was set for a weekly gain of around 1.2% and corn for a weekly rise of about 1%, soybeans remained on track to end the week down 1.7%.

Prices are under pressure from strong supply of wheat from Russia, soybeans from South America and corn from South America and the United States.

The U.S. dollar this week rose to its strongest against a basket of major currencies since November, making U.S. farm exports less competitive.

U.S. soybeans are being out-competed by beans from top producer Brazil, and a plunge in the value of the Brazilian real has triggered a rush of sales by farmers there.

In other crops, the International Grains Council cut its outlook for 2024/25 global corn production by 7 million tons to 1.226 billion tons and for wheat production by 1 million tons to 798 million tons, though both estimates are still increases from the previous season.

Traders are monitoring leafhopper insect plague in Argentina's corn fields and dry weather in portions of the U.S. wheat belt, which could tighten supply.

(Reporting by Peter Hobson; Editing by Sherry Jacob-Phillips and Sonia Cheema)