Falter as sentiment wanes, wheat at 2-week low

* Grain markets going through a long-liquidation phase

* Added weight on wheat from Plains rain forecast

* Waning soy crush, exports weighing on soybeans

* Corn fundamentals bullish but profit-taking weighs

* Coming up: US planting weather, Plains rains eyed (Recasts, updates prices, market activity)

By Sam Nelson

CHICAGO, April 14 (Reuters) - U.S. grain markets fell on Thursday, with wheat tumbling to a two-week low as investors banked profits and forecasts for rain in drought-hit areas of the U.S. Plains rattled the wheat market.

In contrast, rains in the U.S. Corn Belt posed a threat to spring corn seedings, lifting new-crop December corn futures.

Wheat, corn and soybean futures markets, loaded with net long positions by speculators, remained under pressure from a Goldman Sachs recommendation to clients this week to bank profits on crude oil and some other commodities.

At 12:00 p.m. CDT (1700 GMT), CBOT wheat for May delivery was down 11-1/4 cents per bushel at $7.41-1/2, May soybeans down 7 at $13.26-1/2.

Old-crop May corn was down 5-1/2 cents at $7.50 while new-crop December was up 3-3/4 at $6.48-3/4.

A Chicago Board of Trade floor broker said if it were not for climbing crude oil prices, grains prices would fall further.

"I think investors are losing some or their enthusiasm for ownership of commodities" in general, he said.

Crude oil climbed after falling in early dealings and its volatility was unnerving some potential investors in grain and soy.

Soybeans slipped to a one-month low on signs of slowing U.S. demand for the oilseed and puny export sales.

Spot corn was finding spillover selling pressure from falling wheat and soybeans despite soggy weather that is slowing early corn seedings and despite continued robust export sales of U.S. corn at prices near record highs.

"We've had the rain forecasts for the wheat belt for two days in a row now, so that's obviously pressuring the wheat market," said Rich Nelson, research director for Illinois advisory and research firm Allendale, Inc.

Dry weather has been stressing the wheat crop in the Plains, causing irreparable damage to portions of it. But rains will nourish some of the crop ahead of its critical growing season.

A dramatic shift in the U.S. weather pattern will bring much-needed rains to the top winter wheat state of Kansas, but will slow Midwest corn planting and heighten the risk of flooding, a forecaster said on Thursday.

"This is very welcomed news to Kansas," said Telvent DTN forecdaster Mike Palmerino. "We are going to see a shrinking of the dry areas in the state."

Soybean futures fell as U.S. soybean crushers slow processing of soy into soymeal and soyoil due to a buildup of supply of each product as end-users enjoy a glut of soy and soy product this season from Brazil and Argentina.

"Soybeans have a domestic problem," Nelson said. "The NOPA crush was down 10 percent from a year ago and we think USDA will have to lower their crush forecast by 20 million bushels."

The National Oilseed Processors Association (NOPA) said the U.S. soy crush in March totaled 134.391 million bushels, above an average of analysts' estimates for 133.19 million but well below March last year of 149.627 million bushels.

Analysts said soybean crush margins soon will come under renewed pressure from bumper South American crops and on competition from distillers dried grain.

(Source: http://www.forexyard.com/en/news/GRAINS-Falter-as-sentiment-wanes-wheat-at-2-week-low-2011-04-14T172318Z)