GRAINS-Soymeal ends flat after rally amid corn mold worry

* Soymeal leads soy lower after early rally

* Corn mold issue may be overblown

* Weak dollar supports U.S. grains/soy

(Recasts to include close of U.S. trading session, fresh analyst quotes)

By Sam Nelson

CHICAGO, Nov 13 (Reuters) - U.S. soymeal futures ended nearly flat to weak on Friday on profit-taking after jumping to a two-week high as worries about mold in the corn crop led to the potential for a shift toward feeding soymeal to livestock and chickens instead of processed corn.

Traders and analysts said the excessive wet weather in the United States this harvest season caused some of the corn crop to mold and led to the vomitoxin problem.

The fungus can sicken livestock when present in feed at high concentrations and is a byproduct of the fungal disease, Giberella ear rot.

Joe Bedore, CBOT floor manager for trade house FC Stone, said corn traders were worried that the corn mold was resulting in distillers dried grain, a byproduct of ethanol refining that is used to feed livestock.

"The rally was due to the vomitoxin issue and concerns about a cut in DDG use," he said, using the acronym for distillers dried grain, used in livestock and poultry feeding rations as a good source of protein. DDG contains roughly 30 percent protein versus only about 8-10 percent for corn.

Soymeal is a major source of protein supplement in livestock feeds and contains from 44 to 48 percent protein.

U.S. soymeal for December delivery ended up 10 cents per ton at $301.10 after peaking at a two-week high at $312 and posting a nearly 6.5 percent for the week.

November delivery soy finished up 1-3/4 cents per bushel at $9.84 and January delivery soy was down 3 at $9.87, while December corn settled unchanged at $3.90-1/2.

Soymeal ended up 4.3 percent for the week, soybeans up 4 percent, corn up 6.3 percent and wheat up 8.7 percent.

U.S. corn and soybean harvest was stalled by wet weather this season but warmer and drier weather over the past couple of weeks has aided harvesting.

However, there are forecasts for rains again next week, which would snarl final harvest of the soy crop and hamper corn harvest which is only about half complete.

More wet weather now could also worsen the vomitoxin problem.

Soybean futures also found some underpinning by big export sales of U.S. soybeans as seen in the U.S. Department of Agriculture's (USDA) weekly export sales report released on Friday.

"It was a huge soybean number, China is back and I think they will keep buying, so long term it will affect the soybean balance sheet," Bedore said.

Traders and analysts also were looking at the weak dollar and linking the gains in wheat and the early gains in soy to that issue.

A weak dollar makes U.S. commodities a better buy for importers using such currencies as the yen and euro.

"I think it was money flow again. I think the DDG thing has been blown out of proportion," said Paul Haugens, vice-president for Newedge USA.

Analysts in Asia said it was too early to be alarmed. "The vomitoxin story in corn is a little way off in becoming a genuine concern. We are not yet concerned," said Brett Cooper, a trader with MF Global Australia. CBOT settlement prices

Last Change Pct 2008 YTD

Chg Close Pct Chg --------------------------------------------------------------- CBOT corn Cc1> 3.9050 0.0000 0.0 4.07 -4.1 CBOT soy Sc1> 9.8400 0.0175 0.2 9.7225 1.2 CBOT meal SMc1> 301.10 0.10 0.0 300.5 0.2 CBOT soyoil BOc1> 0.3861 0.0024 0.6 0.3329 16.0 CBOT wheat Wc1> 5.3900 0.0725 1.4 6.1075 -11.7 CBOT rice RRc1> 14.6700 0.1900 1.3 15.34 -4.4 EU wheat BL2F0> 131.75 0 0.0 137 -3.8 US crude CLc1> 76.34 -0.6 -0.8 44.60 71.2 Dow Jones .DJI> 10258 60 0.6 8776 16.9 Gold XAU=> 1114.70 11.10 1.0 878.20 26.9 Euro/dollar EUR=> 1.4906 0.006 0.4 1.3978 6.6 Dollar Index .DXY> 75.2740 -0.3220 -0.4 81.1510 -7.2 Baltic Freight .BADI> 4111 157 4.0 774 431 ---------------------------------------------------------------- *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. (Additional reporting by Christine Stebbins and Julie Ingwersen in Chicago, Naveen Thukral in Singapore and Valerie Parent in Paris; Editing by Marguerita Choy)