GRAINS-U.S. corn at 3-week low as higher supply seen
* USDA expected to revise up corn stocks in monthly data
* Weak weekly exports also continue to weigh on corn
* Wheat lower in pre-USDA caution; weather, exports underpin
* Soybean inch higher with support from crude, palm oil
(Updates with European trading, previous dateline NEW DELHI)
PARIS/NEW DELHI, Dec 10 (Reuters) - Chicago corn futures hit a three-week low on Monday in a third falling session as sluggish exports from top supplier the United States and an expected upward revision to U.S. stocks suggested a recovery in supply after a drought-hit harvest.
A higher dollar, which makes U.S. commodities less attractive to holders of other currencies, also curbed Chicago grain futures as investors were unsettled by news that Italian Prime Minister Mario Monti is to resign.
Wheat tracked corn lower, with caution ahead of Tuesday's monthly supply-and-demand estimates from the U.S. Department of Agriculture (USDA) outweighing support from fresh export demand and adverse weather in the U.S. and Argentina.
Soybeans edged higher, with a rise in crude oil and palm oil futures helping it steady after a small drop earlier.
"Weak exports from the United States is the single most important reason behind the fall in corn, but there has been some profit-taking as well, ahead of the USDA data," said Luke Mathews, a commodities strategist at Commonwealth Bank of Australia in Sydney.
Lower export demand would help U.S. corn stocks jump by 2.5 percent to 663 million bushels, a Reuters poll showed, up from the USDA's forecast of 647 million.
Weekly corn exports of 47,000 tonnes, reported on Thursday by the USDA, were far below market expectations and lent weight to the view that high prices triggered by this year's drought-depleted harvest is cooling demand.
Chicago Board Of Trade March corn fell 0.6 percent to $7.32-3/4 a bushel by 1237 GMT. Corn fell 1.9 percent in the previous session, its biggest daily drop in almost a month.
On wheat markets, CBOT March wheat lost 0.5 percent to $8.56-3/4.
In Europe, January milling wheat slipped 0.3 percent to 268.00 euros a tonne, despite additional support from an earlier fall in the euro fuelled by uncertainty over euro zone member Italy.
"Decent demand over the weekend, a drop in the euro, a possible cut in Argentina exports, a loss of area in the U.S. - all this is being put to one side in a very slow market that is awaiting the USDA report," a European trader said.
Import purchases by Iraq and Saudi Arabia showed healthy export demand, and coupled with ongoing harvest problems in Argentina offered the prospect of demand for other exporting zones like North America and the European Union.
Argentina will allow only 4.5 million tonnes of wheat exports this campaign, against 6 million previously planned, in response to a rain-plagued harvest, a local newspaper reported.
Another weather concern is the poor state of U.S. winter wheat crops, which recorded their worst-ever ratings during November.
This year's severe drought, coupled with record warm weather and high winds sweeping across the U.S. Plains, have left the new crop in the worst condition in decades. With no significant improvement soon, many farmers could give up on their wheat acres.
In oilseeds, CBOT January soybeans added 0.2 percent, to $14.74-3/4 a bushel, while February rapeseed in Paris slipped 0.1 percent to 476.25 euros a tonne.
(Writing by Gus Trompiz; editing by Jason Neely)