Legends from Far East for early grades; The Legend of the Milky Way, retold and illustrated by Jeanne M. Lee. New York: Holt, Rinehart & Winston. 30 pp. $11.50. (Ages 4-8.)

Ming Lo Moves the Mountain, by Arnold Lobel. New York: Greenwillow Books. 32 pp. $9.50. (Ages 4-8.)

The legend of the Milky Way is a popular one for telling on clear late summer nights in the Far East. Most often, it's recounted by wistful young teen-agers who long to see two sweethearts, separated by the girl's mother, reunited.

In this picture book for young Westerners, illustrator Jeanne M. Lee has captured the poignancy of the story in drawings that have the full-color splendor of woodblock cuts or silk-screen prints. The peasant boy and his water buffalo trudge their rice-green fields; the Queen Mother looms like a modern day genie; and the weaver princess descends from her heavenly court on clouds reminiscent of Georgia O'Keeffe. One only hopes the delicacy of the folk tale won't be lost on beginning readers.

Sure to hold their attention is Arnold Lobel's far zanier, far more contrived account of how Ming Lo moves the mountain that rains rocks and stones on the roof of his house and keeps the rooms inside drippy.

It's hard to decide who's sillier in this typically farcical Lobel tale - the venerable wise man who counsels Ming Lo to rush at the mountain with a tree and to beat on pots and pans to frighten it away, or Ming Lo, for listening to his inane advice. Whatever, youngsters from 4 to 8 will likely enjoy the soft watercolor drawings, especially when Ming Lo and his wife appear upside down.