GRAINS-Soybeans, grains soar as dollar sinks

* Dollar falls as investors question economy's strength

* Traders await USDA monthly crop data on Wednesday (Updates with closing prices, trader quote)

CHICAGO, June 9 - U.S. grain and oilseed futures rose on Tuesday, with soybeans notching a nine-month top, boosted by the falling dollar and outlooks for supplies to shrink.

A sinking dollar is a buy signal for commodities because a weaker dollar makes U.S. export commodities, such as wheat, corn and soybeans, more attractive to overseas buyers.

The dollar fell on Tuesday as investors questioned whether the economy had improved enough to justify talk of higher U.S. interest rates by year end, prompting investors to sell the greenback and scoop up commodities.

The Reuters-Jefferies CRB index of 19 commodity futures, which includes everything from corn to cattle to crude oil, climbed 1.7 percent.

"The dollar is down, and that's supporting everything," said Vic Lespinasse, an analyst for GrainAnalyst.com.

One veteran Chicago grain broker added: "It is more about money flow than anything else. Big money is going long commodities, shorting the dollar and they are adding to it."

The biggest gainers on the Chicago Board of Trade were wheat and rice.

Much of the strength in wheat was tied to an adjustment in the corn/wheat price relationship after wheat lost "hard" to corn on Monday -- triggering commercial firms to buy wheat and sell corn, traders said.

Chicago Board of Trade July wheat ended 15-3/4 cents higher, or 2.6 percent at $6.13-3/4 a bushel. July corn settled up 9 cents, or 2 percent, at $4.44.

July rice closed 48 cents up, or 3.9 percent, at $12.95-1/2 per hundredweight after rising the 50-cent daily trading limit.

CBOT July soybeans ended up 11 cents, or 1 percent at $12.43-1/2, after hitting $12.49.

USDA MONTHLY REPORT ON WEDNESDAY

Old-crop July soybeans continued to find support from worries about a shrinking U.S. soy supply, given this season's stronger-than-expected export pace.

So far this marketing season, which ends at the start of the U.S. harvest on Aug. 31, soy exports are up 12 percent from last year's record pace. Strong export demand has shrunk the U.S. soy supply to an estimated five-year low of 130 million bushels.

U.S. Department of Agriculture will issue its latest supply outlooks on Wednesday at 8:30 a.m. EDT (1230 GMT).

Analysts surveyed by Reuters expected the USDA to cut projected end-season U.S. soybeans stocks to 114 million bushels.

CBOT settlement prices

Pct YTD

Last Change Chg Close Pct Chg --------------------------------------------------------------- CBOT corn 4.4400 0.0900 2.1 4.07 9.1 CBOT soy 12.4350 0.1100 0.9 9.7225 27.9 CBOT meal 407.80 6.10 1.5 300.5 35.7 CBOT soyoil 0.3945 0.0005 0.1 0.3329 18.5 CBOT wheat 6.1375 0.1575 2.6 6.1075 0.5 CBOT rice 12.9550 0.4800 3.9 15.34 -15.5 US crude 69.97 1.88 2.8 44.60 56.9 Dow Jones 8772 7 -1.9 8776 -0.1 Gold 926.75 5.90 0.6 878.20 5.5 Euro/dollar 1.4079 0.0185 1.3 1.3978 0.7 Dollar Index 79.7550 -1.0700 -1.3 81.1510 -1.7 Baltic Freight 3518 -128 -3.5 774 354.5 --------------------------------------------------------------- Front-month contracts, in U.S. dollars Wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb.