GRAINS-Harvest delays spark rally in corn, soy futures

* Corn futures rise 2.9 percent on harvest delays

* CBOT soybeans up 1.5 percent

* Wheat also strong amid slow seeding of winter crop (Recasts with U.S. trading, previous dateline SYDNEY)

CHICAGO, Oct 21 - U.S. corn and soybeans rallied in early trading at the Chicago Board of Trade on Wednesday, with the nearby corn contract reaching a four-month high amid fears of further delays to a harvest that was well behind schedule.

New weather forecasts that showed that the Midwest will be wetter than expected during the next 10 days sparked concerns about tight supplies in the country. Grain prices are typically under pressure during harvest as elevators are flooded with deliveries from the fields.

"The harvest is going to be basically shut down tomorrow and then we are going to be be wet into late week, early weekend," said Rich Feltes, senior vice president of MF Global Research in Chicago. "We are pushing more of this harvest into November and I think between that and the money flow, what's going on in the dollar, there is more than enough fuel here to take things higher here today."

Wheat prices also rallied on Wednesday, rising 2.4 percent, on spillover support from the gains in corn and soy futures. Additionally, the wet weather has slowed the seeding of the winter wheat crop.

At 10:29 a.m. CDT (1529 GMT), CBOT December corn futures were up 11 cents at $3.95-1/2, a rise of 2.9 percent. The nearby contract rose to a session high of $3.98-1/2, its highest level on a continuous basis since hitting $3.99-1/4 on June 19.

November soybean futures were up 14-1/4 cents, or 1.5 percent, at $9.96-3/4 a bushel. The December soft red winter wheat contract rose 12-1/4 cents to $5.29-3/4 a bushel. The spot wheat contract traded at $5.34, its highest level since Aug. 5.

Many analysts had expected grain futures to open lower on Wednesday but the U.S. dollar weakened shortly before trading started and the stock market turned higher, providing a supportive environment that created buying opportunities for investment funds.

"Since early this morning the dollar broke, so the funds are buying again," said Paul Haugens, vice president for Newedge USA.

Storms arriving in the U.S. Midwest should halt harvest through the end of the week. Another big storm, which could bring snow to the northwestern part of the Corn Belt, was expected Tuesday or Thursday of next week, said Mike Palmerino, a forecaster for DTN Meteorlogix.

Soybean and corn crops need to be harvested before winter wheat crops can be planted in areas where farmers double crop.

Planting of soybean crops in Brazil, the world's second largest soy exporter, has also been disrupted in the country's south by heavy rain.

"There are some concerns about the Brazilian crop and its quality," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.

The trade was pondering whether China, the world's largest soy importer, would bite into its reserves while it awaited the rebuilding of South American supplies by next spring, FC Stone analyst Doug Jackson wrote in a report.

"How much China can destock as they await for a rebuilding of South American supplies by next spring is debatable," he said. Prices at 10:33 a.m. CDT (1533 GMT)

Pct 2008 YTD

Last Change Chg Close Pct Chg --------------------------------------------------------------- CBOT corn 3.9700 0.1250 3.3 4.07 -2.5 CBOT soy 9.9750 0.1500 1.5 9.7225 2.6 CBOT meal 298.70 6.20 2.1 300.5 -0.6 CBOT soyoil 0.3775 0.0028 0.8 0.3329 13.4 CBOT wheat 5.3175 0.1425 2.8 6.1075 -12.9 CBOT rice 13.6450 0.0800 0.6 15.34 -11.0 EU wheat 129.00 1.25 1.0 137 -5.8 US crude 80.10 0.98 1.2 44.60 79.6 Dow Jones 10088 46 0.5 8776 14.9 Gold 1059.30 5.30 0.5 878.20 20.6 Euro/dollar 1.5003 0.007 0.5 1.3978 7.3 Dollar Index 75.1210 -0.4440 -0.6 81.1510 -7.4 Baltic Freight 2917 85 3.0 774 277 -------------------------------------------------------------- * In U.S. dollars, front-month contracts, except EU wheat, which is in euros, CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb.