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GRAINS-Corn, soy rally as U.S. weather threatens more planting problems

Tom Polansek

* More rains expected to delay plantings in U.S. Farm Belt

* Traders assess fallout from wet weather rain this spring

* Gains in corn futures help lift wheat, soybeans (Recasts with start of U.S. trading, changes byline/dateline; pvs PARIS/SINGAPORE)

CHICAGO, June 12 (Reuters) - U.S. grain and soybean futures jumped to one-week highs on Wednesday as rains threatened to further delay corn and soy plantings and put crop yields at risk.

The gains came a day after the U.S. Department of Agriculture (USDA) on Tuesday cited "unprecedented planting delays" as the reason for slashing its forecast for corn yields more than expected.

Heavy rains stalled plantings this spring and traders remain unsure about how many acres of corn and soy will be planted and how much the harvests will yield.

Now, more rain is expected across the Corn Belt, including parts of Missouri, Illinois, Indiana and Iowa, said Brian Hoops, president of U.S.-based broker Midwest Market Solutions.

The showers could stop farmers who are still scrambling to plant corn or delay those seeking to plant soybeans. Soybeans are typically planted after corn. Late planting of either crop raises the risks that yields could be hurt by hot summer weather or an autumn frost.

"It's a really bad forecast to try to get anything done for corn and soybean planting," Hoops said.

The most-active corn contract on the Chicago Board of Trade (CBOT) was up 1.2% at $4.32-3/4 a bushel by 11:10 a.m. CDT (1610 GMT), after rising 2.9% on Tuesday.

The gains helped lift soybeans and wheat, traders said.

CBOT wheat was up 1.5% at $5.25-1/2 a bushel, after ending Tuesday up 2.1%. Soybeans were up 2.8% at $8.83 a bushel.

The USDA on Tuesday slashed its corn yield projection in a monthly report by 10 bushels an acre, or 5.7%, to 166 bushels. Analysts had on average expected a smaller decline to 172.4 bushels.

The drop, along with a 3% decrease in the USDA's acreage estimate, left the government's production outlook at 13.68 billion bushels, which would be the smallest harvest in four years.

"The report yesterday really set the wheels in motion that USDA recognizes there are some crop issues," Hoops said.

The USDA on Tuesday left its estimates for soybean production and yields unchanged from May.

It is "far too early to make informed call on soy acres or yield," said Rich Feltes, vice president of research for broker RJ O'Brien.

Upcoming rains may be "largely beneficial for crops planted but harmful for 10-12 million acres of unplanted corn," he said in a note.

Adjustments to the soybean crop outlook can be expected in the USDA's July report, its chief economist told Reuters. (Additional eporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Jan Harvey and Tom Brown)