GRAINS-Wheat retreats after short-covering rally, corn and soybeans also lower

PARIS/CANBERRA, May 22 (Reuters) - Chicago wheat fell on Thursday as a short-covering rally that took prices to a one-month peak petered out, with traders seeing limited threats to Northern Hemisphere crops despite adverse weather spells.

Corn and soybeans also eased after three-day gains, with a steadier dollar, weaker crude oil and generally favourable crop conditions curbing the markets.

The most active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was down 1.1% at $5.43 a bushel at 1130 GMT, moving back from Wednesday's one-month high of $5.56-1/4.

After dropping to a near five-year low of $5.06-1/4 on May 13, concerns over adverse weather in Russia and China and an unexpected decline in U.S. wheat ratings triggered a wave of short-covering in the past week.

But traders were sceptical that Chinese or Russian wheat crops have suffered significant damage, while the U.S. remains on track for a large harvest despite disease risks in some areas.

Consultant Sovecon raised its 2025 Russian wheat production forecast to 81 million metric tons from 79.8 million tons, though warned that persistent dryness in many regions could still cause crop losses.

Benchmark wheat on Euronext BL2U5 also fell back from a one-month top reached on Wednesday.

"Wheat rose in a short-covering vacuum. There's not much really to be bullish about in this market," a European trader said.

Commodity funds hold a large net short position in CBOT and Euronext wheat, leaving the markets prone to bouts of short-covering.

CBOT soybeans Sv1 were down 0.5% at $10.57-1/4 a bushel after touching a one-week peak on Wednesday. CBOT corn Cv1 eased 0.7% to $4.58 a bushel after earlier equalling a two-week peak from the previous session.

Soybeans had drawn support from flood risks to Argentina's ongoing harvest. But the Buenos Aires Grains Exchange said on Wednesday that dry weather in the coming days will help muddy fields.

In Brazil, the second corn crop is estimated at a record 112.9 million metric tons, up 10.5% from the previous season, consultants Agroconsult said on Wednesday.

Chicago prices had also been underpinned by a falling dollar since this week amid worries over the U.S. economy, making U.S. crops more attractive to overseas buyers. But the dollar index =USD rose slightly on Thursday. USD/

Traders will get an update on international demand from weekly U.S. export sales figures later on Thursday.