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GRAINS-Wheat rebounds as dry weather curbs Russia crop outlook

Nigel Hunt

* Drier weather in U.S. Midwest may aid corn, soy plantings

* Dryness in Australia, Russia threatens to cut wheat yields

* Rains boost outlook for wheat crops in western Europe

* (Adds quotes, updates prices)

LONDON, June 6 (Reuters) - Chicago wheat futures rose on Thursday, rebounding after two days of deep losses, with support from dry weather that is expected to reduce yields in Russia and Australia.

The most-active wheat contract on the Chicago Board of Trade was up 0.7% at $4.94 a bushel by 1118 GMT, having lost more than 5% in the two previous sessions.

"Wheat is finding support on continued dryness in Russia," brokerage Allendale said in an analyst note.

SovEcon earlier this week downgraded its forecast for Russia's 2019 wheat crop due to dry weather in May and could cut it further if the weather remains dry this month.

Dry weather is also a concern in Australia.

"The next three months are expected to be dry in much of Australia and people have started to reduce estimates for production in the Black Sea region due to the dry weather," said one Singapore-based trader.

In contrast, the outlook for crops in western Europe has improved after recent rains and September milling wheat futures in Paris was down 0.25 euros or 0.1 percent at 178.75 euros a tonne.

Germany's 2019 wheat harvest will increase 21.9% on the year to 24.70 million tonnes as hopes of a recovery continue after drought caused massive harvest damage last year, the country's association of farm cooperatives said on Wednesday.

"The recent rainfall has prompted the German Farmers Cooperative to slightly raise its forecast for this years wheat crop in Germany," Commerzbank said in a market note.

Chicago soybeans fell 0.9% to $8.62-1/4 a bushel, having closed down 1.4% on Wednesday, while corn lost 0.3% to $4.13-1/2 a bushel after closing down 2.5% on Wednesday.

Dealers said forecasts for drier weather in the U.S. Midwest may provide farmers with an opportunity to get crops planted and had helped to trigger profit-taking.

Rain delays have been a major concern and could limit the amount of corn planted in the U.S. Midwest this season.

There is additional pressure on corn prices amid fears of a trade war between the United States and Mexico, which is a major importer of U.S. corn.

Mexican importers, who usually buy their corn from the United States, have booked a 35,000-tonne corn cargo from Brazil. (Additional reporting by Naveen Thukral in Singapore; editing by Richard Pullin and Elaine Hardcastle)