Corn rises as US crop condition deteriorates; wheat up nearly 3%

* Dry weather in U.S. Midwest supports corn, soybean prices

* Wheat gains 2.7% on Australia's lower output, China weather

SINGAPORE, June 6 (Reuters) - Chicago corn rose 1.4% on Tuesday after a weekly government report showed a sharp decline in U.S. crop rating amid hot and dry weather in parts of the Midwest grain belt.

Wheat rose for a fifth consecutive session, climbing 2.7% on support from tightening world milling wheat supplies, with Australia estimating lower output in 2023/24 and excessive rains hitting the crop in China.

"Dryness in the U.S. is lifting corn and soybean prices, even though it is bit early as the crop has just been planted," a Singapore-based trader said. "The market is building some weather premium."

The most-active corn contract on the Chicago Board of Trade (CBOT) was up 1.4% at $6.05-3/4 a bushel, as of 0455 GMT. Wheat added 2.7% to $6.41 a bushel and soybeans gained 0.7% to $13.60 a bushel.

The U.S. Department of Agriculture (USDA) rated 64% of the U.S. corn crop in good-to-excellent condition in its weekly crop progress report on Monday, down 5 percentage points from a week ago and below the lowest in a range of estimates in a Reuters poll.

After the market closed on Monday, the agency rated 62% of the soybean crop as good-to-excellent in its first 2023 condition ratings for the oilseed, below most trade expectations. The United States is the world's second-largest exporter of corn and soybeans after top supplier Brazil.

Lower demand for U.S. grains and oilseeds, however, limited the upside potential in prices. The USDA said on Monday weekly export inspections of corn fell to 1.180 million tonnes from 1.346 million tonnes the prior week.

Soybean export inspections were reported at 214,247 tonnes, down 11.9% from a week earlier.

Australian winter crop production is set to fall from record highs, according to the country's agricultural department, as forecasters predict drier weather after three years of record rainfall brought on by back-to-back La Nina weather patterns.

Total Australian winter crop production, including wheat, is forecast to fall by 34% to 44.9 million tonnes in 2023–24, around 3% below the 10-year average to 2022–23 of 46.4 million tonnes, according to the June crop report from the Department of Agriculture, Fisheries and Forestry.

China's wheat crop has been hit by excessive rains just before the harvest, resulting in widespread crop downgrades.

The European Commission said on Monday it was extending until Sept. 15 an arrangement whereby five of Ukraine's EU neighbours can restrict imports of Ukrainian grain.

Commodity funds were net sellers of CBOT corn, soybean and soyoil futures contracts on Monday, and net buyers of soymeal and wheat, traders said.

(Reporting by Naveen Thukral; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)