CANBERRA, July 8 (Reuters) - Chicago wheat futures fell on Monday as a steadying of the U.S. dollar and an abundant supply outlook prompted investors to renew their bearish stance.

Wheat's declines were a reversal of fortunes after a rapidly weakening U.S. dollar and strong U.S. wheat exports lifted prices last week.

Corn and soybean futures also fell on Monday as expectations of ample supply reasserted themselves after concerns that dry, hot weather would damage U.S. crops lifted prices last week.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.5% at $5.81-1/2 a bushel by 0551 GMT, while CBOT corn fell 0.9% to $4.20-1/4 a bushel and soybeans dipped 1.2% to $11.16-1/4 a bushel.

Strong supply outlooks are holding all three contracts near their lowest since 2020.

Wheat is under pressure from ongoing harvests in the northern hemisphere bringing new supply onto the market.

Weather conditions have improved in major exporters Russia, the United States and Canada in recent weeks, and an abundance of corn is also dragging on wheat prices, said Vitor Pistoia, an analyst at Rabobank in Sydney.

Wheat and corn prices are linked because both can be used as animal feed. U.S. and Brazilian farmers are holding corn back from the market in the hope of better prices, leading to increased stockpiles, Pistoia said.

"Prices have probably found a floor," he said. "But if corn goes down it will drag wheat down too."

The U.S. dollar rose slightly on Monday after weakening rapidly last week due to expectations of U.S. interest rate cuts. A weaker dollar makes U.S. farm goods more affordable for buyers with other currencies, which can improve demand.

Tempering the bearish mood for wheat were forecasts for low French production. This year's soft wheat harvest in France could see yields at an eight-year low and 11% below the 10-year average because of wet weather, crop institute Arvalis and grain industry group Intercereales said.

Speculators hold large net short positions in CBOT wheat, corn and soybeans, making those markets vulnerable to bouts of short covering that push up prices.

Commodity funds were net buyers of CBOT corn, wheat, soyoil, soybeans and soymeal on Friday, traders said.

(Reporting by Peter Hobson; Editing by Mrigank Dhaniwala and Janane Venkatraman)