GRAINS-Soy drops on slowing demand for U.S. exports; wheat rebounds

* South American soy supplies flood market

* Corn drops for first time in five sessions

* Wheat rebounds on short-covering, demand for feed

(Updates with wheat turning higher, adds details, updates prices) CHICAGO, March 13 (Reuters) - U.S. soybean futures tumbled for a second straight day on Wednesday on slowing global demand for the remnants of last autumn's U.S. harvest as South American supplies begin to flood the market. Corn prices declined on profit-taking and technical selling, snapping a four-session streak of gains. Additional pressure came from a firmer U.S. dollar, which makes dollar-denominated commodities more expensive for buyers holding other currencies. Wheat rebounded, bucking pressure from lower corn and soy and the higher greenback, as rising demand from domestic livestock producers seeking to replace high-priced corn in feed rations triggered short-covering and technical buying. Traders unwound bullish spread bets in corn and soybeans by selling nearby contracts and buying deferred positions, eroding some of the premiums that shorter-dated contracts have built up amid concerns about historically tight U.S. supplies. "The dollar being up is one thing but the main thing is unwinding of bull spreads. Bull spreads have been driving this higher in both beans and corn and they're unwinding those now," said Sterling Smith, futures strategist for Citigroup. "Product is starting to become available from Brazil, beans and also some corn, so that will be coming on line." Brazilian farmers have harvested about half of an expected record-large soybean crop. Although there are lengthy vessel delays of up to 60 days at Brazilian ports, prices for mid-April shipment and beyond have made springtime exports from the United States less competitive. Chicago Board of Trade May-delivery soybeans fell 19 cents, or 1.3 percent, to $14.49-3/4 per bushel by 12:26 p.m. CDT (1726 GMT) while new-crop November futures dipped 8 cents, or 0.6 percent, to $12.61-1/2 a bushel. CBOT May corn dropped 4 cents, or 0.6 percent, to $7.10-1/4 a bushel after matching a 4-1/2-week high of $7.17-3/4. The contract's drop below its 50-day moving average of $7.08-3/4 earlier pushed it to a session low. New-crop December shed 3-3/4 cents, or 0.7 percent, to $5.53-1/2.

FEED WHEAT DEMAND Rising demand for wheat in animal feeding rations this year amid historically high corn prices fuelled a short-covering bounce in wheat, a market that boasts a considerable net short position by managed funds. Demand for feed wheat has increased since BNSF Railway last week cut its rate to ship U.S. soft red winter wheat from Chicago to the U.S. cattle hubs of west Texas and western Kansas. "There's a lot of wheat being booked into the panhandle and Texas. That demand for physical wheat has gotten that May/July spread into an inverse and that, in and of itself, is a bit of a chart signal that got people's attention," said Tim Emslie, research manager with Country Hedging. Meanwhile, near-term export prospects for SRW wheat remained strong due to competitive prices in the world market. Iran has been in talks to buy around 110,000 tonnes of U.S.-origin milling wheat for April shipment. CBOT May wheat added 4-1/2 cents, or 0.6 percent, at $7.08 a bushel. Buying accelerated as the contract breached chart resistance at its 14-day moving average of $7.05-1/2.

Prices at 12:32 p.m. CDT (1732 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 710.50 -3.75 -0.5% 9.9% CBOT soy 1453.50 -15.25 -1.0% 21.3% CBOT meal 432.50 -3.70 -0.9% 39.8% CBOT soyoil 49.52 -0.46 -0.9% -4.9% CBOT wheat 708.75 5.25 0.8% 8.6% CBOT rice 1490.50 -33.00 -2.2% 2.1% EU wheat 233.00 0.50 0.2% 15.1%US crude 92.40 -0.14 -0.2% -6.5% Dow Jones 14,458 8 0.1% 18.3% Gold 1588.64 -3.45 -0.2% 1.6% Euro/dollar 1.2961 -0.0071 -0.5% 0.1% Dollar Index 82.8880 0.3040 0.4% 3.4% Baltic Freight 875 10 1.2% -49.7%

(Additional reporting by Sam Nelson in Chicago; Editing by Dale Hudson)