GRAINS-Markets sink on improved U.S. weather, fund selling

* Wheat suffers biggest one-day drop in more than a year

* Rain forecast in dry U.S. Plains in coming week

* Warmer temperatures expected to speed up corn, soy planting

(Adds closing prices, fund selling, estimates for crop-progress report) CHICAGO, April 21 (Reuters) - U.S. wheat futures fell the most in more than a year on Monday as rains expected in the drought-stricken U.S. Plains raised hopes for the upcoming harvest. Improved weather also pressured corn and soybean futures amid projections for accelerated plantings in the U.S. Midwest. Technical and fund selling helped drive losses in all the markets, traders said. "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 closed down 23 cents, or 3.3 percent, at $6.68-1/4 after touching a one-week low of $6.62-3/4 earlier in the session. It was the biggest daily drop in percentage terms for the front-month contract since a 3.5 percent slide on April 1, 2013.

May corn ended down 6-1/4 cents, or 1.3 percent, at $4.88-1/2 a bushel after hitting a three-week low of $4.85-1/2. May soybeans lost 15-1/4 cents, or 1 percent, to $14.98-3/4. Commodity funds sold an estimated 9,000 corn contracts, 7,000 wheat contracts, and 5,000 soybean contracts, traders said. Traders were focusing on weather conditions after cool temperatures slowed the start of field work in the Midwest and dryness raised concerns about poor wheat production. 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). Analysts polled by Reuters estimated farmers had seeded 5 percent to 13 percent of their 2014 corn acres as of Sunday. The average trade estimate of 9 percent compared with the seasonal average of nearly 14 percent by late April. "This week could be a big one for planting progress," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage. Dealers said dry soils remained a concern in key U.S. hard red winter states such as Kansas, although weekend rains likely brought some relief. Forecasters were 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.

"UGLY DAY" Strength in the U.S. dollar and worries about the potential for China, the world's top soybean importer, to cancel purchases of the oilseed added pressure on prices, 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.

"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.

Prices at 2:12 p.m. CDT (1912 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 488.50 -6.25 -1.3% 15.8% CBOT soy 1498.75 -15.25 -1.0% 14.2% CBOT meal 485.70 -2.60 -0.5% 11.0% CBOT soyoil 43.00 -0.41 -0.9% 10.8% CBOT wheat 668.25 -23.00 -3.3% 10.4% CBOT rice 1519.00 -17.00 -1.1% -2.1% EU wheat 217.00 -1.50 -0.7% 3.8% US crude 104.28 -0.02 0.0% 6.0% Dow Jones 16,440 32 0.2% -0.8% Gold 1288.85 -4.80 -0.4% 6.9% Euro/dollar 1.3793 -0.002 -0.1% 1.0% Dollar Index 79.9460 0.1180 0.2% -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 and Chizu Nomiyama)