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GRAINS-Wheat rallies as weather worries return, soy steady after slide

* Wheat up about 2 pct as crop weather concerns back in focus Poor U.S. yields feared, dry Australia, Russia belts watched

* Soybeans steady after slide as U.S.-China developments eyed

(Updates with European trading, changes byline/dateline) PARIS/SINGAPORE, May 17 (Reuters) - U.S. wheat futures rose sharply on Thursday as concerns over adverse weather hitting yields in the U.S. Plains and dryness stressing crops in Australia and Russia came back to the fore. Soybeans edged higher, steadying after a near two-week low linked to fears about Chinese demand for U.S. supplies amid trade tensions between the two nations. Corn also ticked up, underpinned by the risk of rain delays to U.S. planting and yield losses in drought-affected Brazilian corn belts. The Chicago Board of Trade's most-active wheat contract gained 1.9 percent to $5.03-3/4 a bushel by 1039 GMT, rising for a third straight session, while Kansas hard red winter wheat futures climbed 2.3 percent to $5.25-3/4. "There is some support for the wheat market at current levels because of a drought in the U.S. southern Plains. The USDA is showing some improvement in crop rating but there will be yield losses," said one India-based agricultural commodities analyst. Wheat prices had been under pressure at the start of the week after an improvement in official crop ratings and a higher than expected government forecast of the U.S. crop have since weighed on prices. But analysts still expect mixed yields after prolonged drought. "U.S. winter wheat yields down further due to more adverse growing conditions in the Southern Plains," Thomson Reuters Agriculture Research analysts said in a note. Dry conditions in Australia and Russia, also major wheat producers, were underpinning prices. Australian farmers are planting wheat in some of the driest soils in years, following on from a severe drought that cut 2017/18 output in the world's fourth-largest exporter to the lowest in a decade. "There is drought in Australia, but crop there has a long way to go. Overall, we don't see a major rally in wheat prices as the market is very well supplied," the India-based analyst said. CBOT soybeans were up 0.6 percent at 10.05-1/2 a bushel after dropping to their lowest since April 4 at $9.98 earlier in the session. Corn added 0.6 percent to $4.01-1/2 a bushel. The soybean market is focused on the outcome of trade talks between the United States and China. Chinese demands for U.S. shipments have taken a hit since Beijing proposed import duties last month. Grain investors will receive a fresh indication of overseas demand from weekly U.S. export sales data at 1230 GMT.

Prices at 1039 GMT

Last Change Pct End Ytd Pct Move 2017 Move CBOT wheat 503.75 9.50 1.92 427.00 17.97 CBOT corn 401.50 2.25 0.56 350.75 14.47 CBOT soy 1005.50 5.75 0.58 961.75 4.55 Paris wheat Dec 176.00 1.50 0.86 170.00 3.53 Paris maize Jun 166.75 0.75 0.45 163.50 1.99 Paris rape Aug 352.00 0.00 0.00 349.00 0.86 WTI crude oil 72.14 0.65 0.91 60.42 19.40 Euro/dlr 1.18 0.00 -0.21

Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore Editing by Subhranshu Sahu and David Goodman)