Wheat stumbles as global markets slump, corn and soy tick up

* World financial market crash hits wheat

* Weaker dollar supports corn and soybeans

* Funds buy back short positions in corn and soybeans

CHICAGO, Aug 5 (Reuters) - Chicago wheat futures fell on Monday on spillover weakness as global financial markets tumbled on fears of a U.S. recession, while forecasts for large U.S. crops also weighed.

Corn and oilseeds strengthened slightly as the weaker dollar supported U.S. exports and funds bought back some of their short positions.

Chicago Board of Trade most-active wheat fell 3-1/4 cents to $5.35-3/4 a bushel at 12:37 p.m. CDT (1737 GMT).

Corn rose 2-1/2 cents to $4.05-3/4 a bushel. Soybeans jumped 11 cents to $10.38-1/4 a bushel.

Global stock markets tumbled on Monday as fears of a U.S. recession sent investors fleeing from risk, while wagering that rate cuts would be needed to rescue growth, with the dollar falling against major currencies.

The lower-trending dollar is a supportive factor for corn and soybeans, said Randy Place, analyst with the Hightower Report. A weaker dollar tends to make U.S. exports more attractive.

He added that commodity funds were already heavily short in corn and soybeans. When the stock market is down significantly with energy and metals also sinking, the funds have to reduce risk and buy back some of their short positions, said Place.

But he said wheat was struggling with a large U.S. balance sheet. "That's kind of a dark cloud over the wheat."

U.S. weather was forecast to be largely dry this week, also positive for the final stages of the U.S. winter wheat harvest.

The U.S. Department of Agriculture is due to report on U.S. crop progress and conditions later on Monday, with analysts expecting small declines in soy and corn ratings.

The EU wheat harvest, hindered by summer rain, was showing progress. French farmers harvested 67% of this year's soft wheat crop by July 29, advancing from 41% a week earlier, though behind usual progress after rain disrupted work. (Reporting by Renee Hickman in Chicago, additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore Editing by Matthew Lewis)