* Wheat drops 3.6 percent to one-week low
* Rain forecast in dry U.S. Plains in coming week
* Warmer temperatures expected to speed up corn, soy planting
(Updates with U.S. trading, changes dateline from LONDON) CHICAGO, April 21 (Reuters) - U.S. grain and soybean futures sank on Monday as improved weather conditions raised projections for the upcoming wheat harvest in the Plains and for Midwest corn planting. Wheat futures dropped 3.6 percent to a one-week low on expectations for more rainfall in the drought-stricken Plains. Corn futures fell 1.4 percent to a three-week low as warmer weather was projected to speed up planting. Traders were focusing on weather after cold wintry weather slowed the start of field work in the Midwest and dry weather raised concerns about poor wheat production in the central and southern Plains. "The wheat is the star of the show," said Sterling Smith, futures specialist for Citi. "Good rains were seen in production areas along with a better weather outlook, which is featuring two more chances at significant rainfall during the coming week." Chicago Board of Trade wheat for May delivery was down 25-1/2 cents, or 3.7 percent, at $6.65-3/4 a bushel at 10:15 a.m CDT (1515 GMT). CBOT May corn slid 7 cents, or 1.4 percent, to $4.87-3/4 a bushel, while May soybeans lost 24-1/2 cents, or 1.6 percent, to $14.89-1/2. The U.S. Department of Agriculture will issue an update on the condition of the wheat crop and on planting progress for corn and soybeans in a weekly report due at 3 p.m. CDT (2000 GMT). Dealers said dryness in key U.S. hard red winter states such as Kansas remained a concern, although weekend rains likely brought some relief. Forecasters are eyeing multiple storm systems across much of Kansas, Oklahoma, Texas, Nebraska and Colorado during the next two weeks, noted Joe Vaclavik, president of Standard Grain. "It looks as if field work will commence throughout the Corn Belt this week and next week," he said.
"UGLY DAY" Traders also were worried about the potential for China to cancel soybean purchases and were keeping a close watch on developments in Ukraine, a major exporter of both wheat and corn. An agreement reached last week to avert wider conflict in Ukraine was faltering as the new week began, although grain traders downplayed the risk for interrupted shipments.
"It looks like it's going to be an ugly day for the grain futures today with prices having little reason to trade higher, thus being pushed lower by strong selling pressure," said Kayla Burkhart, broker for SunPrairie. Strength in the U.S. dollar added pressure on prices by making U.S. crops less attractive to foreign buyers, traders said. The USDA reported that 495,250 tonnes of U.S. wheat were expected for export in the week ended April 17, below analysts' estimates for 500,000 to 700,000 tonnes. Inspections of 1.6 tonnes of corn for export topped expectations for 1.05 to 1.55 million, and soybean inspections of 138,777 tonnes were within expectations of 135,000 to 350,000 tonnes.
Prices at 10:10 a.m. CDT (1510 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 488.25 -6.50 -1.3% 15.7% CBOT soy 1491.00 -23.00 -1.5% 13.6% CBOT meal 483.00 -5.30 -1.1% 10.3% CBOT soyoil 42.79 -0.62 -1.4% 10.2% CBOT wheat 665.75 -25.50 -3.7% 10.0% CBOT rice 1521.00 -15.00 -1.0% -1.9% EU wheat 217.00 -1.50 -0.7% 3.8% US crude 104.54 0.24 0.2% 6.2% Dow Jones 16,423 14 0.1% -0.9% Gold 1286.90 -6.75 -0.5% 6.8% Euro/dollar 1.3796 -0.0017 -0.1% 1.1% Dollar Index 79.9410 0.1130 0.1% -0.1% Baltic Freight 930 -6 -0.6% -59.2%
(Additional reporting by Nigel Hunt in London amd Naveen Thukral in Singapore; editing by Jane Baird)