GRAINS-Soy futures rise on weak dollar; wheat hits contract lows

* U.S. soy futures rise due to dollar weakness

* Talk that China interested in buying strengthens soy

* Plentiful supplies pressure wheat to contract lows

* Weak dollar also supports corn (Recasts, updates prices, market activity to CBOT close)

CHICAGO, Sept 8 - Soybean futures rose at the Chicago Board of Trade on Tuesday due to strength in crude oil, weakness in the dollar and talk that China was interested in buying U.S. supplies, traders said.

A falling dollar and weak cash markets made U.S. soybeans cheaper on the world market, reinforcing ideas that Chinese buyers were likely to make a purchase soon.

"We have a weak dollar and that is the underlying support," said Don Roose, analyst with U.S. Commodities in West Des Moines, Iowa. "Rumors continue that China is underneath the market buying soybeans."

The weak dollar also supported corn, which rallied after falling below the key level of $3 a bushel for the first time in 2009 during Globex trade early on Tuesday.

But the drop in the dollar failed to boost the wheat market, which fell as plentiful global supplies outstripped demand.

"There is plenty of wheat around the world as a whole," said Vic Lespinasse of GrainAnalyst.com. "The bulk of the wheat crop in the United States is not in any danger of any weather problems currently."

Wheat contracts at the Chicago Board of Trade, Kansas City Board of Trade, Minneapolis Grain Exchange all fell to new lows on Tuesday along with milling wheat in Paris.

France's farm ministry raised on Tuesday its estimate for the country's 2009 soft wheat crop to 37.30 million tonnes from 36.08 million last month.

CBOT soybeans for November delivery settled up 14-1/2 cents at $9.36-1/2 a bushel. The thinly traded September contract finished up 8 cents at $9.69 a bushel.

The dollar slumped to its lowest level in almost a year against a basket of major currencies on rising investor appetite for risk. Oil prices rose above $71 a barrel.

CBOT corn for September delivery was 2-1/4 cents higher at $3.02-3/4 a bushel and December corn was up 1-1/4 cents at $3.07-1/2.

CBOT December wheat finished down 12-3/4 cents at $4.59 a bushel. The contract hit a new low of $4.57 during the trading session.

The market was waiting for a U.S. Agriculture Department (USDA) report due on Friday that is expected to raise estimates on what are already forecast to be bumper crops.

"Private forecasts are already pointing to bigger crops on the back of yield increases so the USDA data (on Friday) will only confirm the forecasts already in the market," said Colin Lethbridge, trading desk manager at FC Stone.

Other dealers also said raised forecasts were unlikely to have a major impact on prices as expectations for bumper harvests have already been factored into the market.

"We've seen big crop estimates (from private forecasters) and people have targeted 13 billion bushels of corn and 3.3 billion bushels of soybeans whatever happens with the USDA," one dealer said.

"If the (USDA) production figures are a bit lower, I don't think people will see that as massively bullish," the dealer added.