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GRAINS-Wheat retreats from 4-month high on profit-taking

Sam Nelson
Monday, 21 Oct 2013 | 11:17 AM ET

* Chicago, Paris wheat hit highest since early June, then ease

* Doubts over low official estimate of Argentine crop

* Export demand supportive as USDA plans data catch-up

(Updates to include U.S. trading session, adds fresh analyst quotes, changes dateline from PARIS/SINGAPORE)

CHICAGO, Oct 21 (Reuters) - U.S. and European wheat futures retreated on profit-taking and technical selling on Monday after rising to their highest levels since early June on last week's report of a low official crop estimate in Argentina.

By 9:43 a.m. CDT (1443 GMT), Chicago Board of Trade December wheat was down 10-3/4 cents per bushel at $6.95, December corn was down 2-1/2 at $4.39 and November soybeans were up 2-3/4 at $12.94.

"Wheat was overdone, it came up and kissed the 200-day (moving average) and backed off. No one is too enthralled about wheat going much above $7.00 dollars with corn below $5.00," said Sterling Smith, futures specialist for Citigroup.

Corn eased on seasonal harvest pressure and soybeans rose on good demand from China, the world's largest buyer of soybeans.

"Corn and soybeans are seeing harvest pressure. There may be a little slower harvest this week which is supporting beans, that and China's buying," Smith said.

A first official estimate of the 2013/14 Argentine wheat crop late on Thursday at 8.8 million tonnes surprised the market as it was well below other estimates and suggested the exporter may have even less supply than anticipated.

This added to a picture of tightening global supply and held up the prospect of more demand in neighbouring Brazil being switched to the United States for supply.

But traders said there were media reports that the official Argentine outlook was erroneous and would be corrected, encouraging some selling at the end of the overnight session for Chicago Board of Trade futures.

"We're trying to analyse this Argentine crop estimate to see if the figure is valid," one European grain trader said.

The Buenos Aires Grains Exchange last week maintained its crop forecast at 10.35 million tonnes, while the U.S. Department of Agriculture last month put the crop at 12 million.

"We've gained a lot of ground in the past few days, so maybe it's time for the market to take a breather," another European trader said.

Chicago wheat climbed 2.9 percent on Friday as the Argentine crop estimate boosted export sentiment.

USDA data released after the market close then showed net sales of 837,800 tonnes for the week ending Sept. 26, up 35 percent from the previous week and 32 percent more than the prior 4-week average.

The USDA is catching up on reporting that was interrupted during a two-week partial government shutdown in a political tow over the budget.

"Corn is facing seasonal harvest pressure. There are forecasts of some light showers which are unlikely to have a significant impact on the pace of the harvest," said Vanessa Tan, investment analyst at Phillip Futures in Singapore.

U.S. corn production is expected to jump nearly 30 percent from last year's drought-reduced crop, leading to an expected supply build-up from a 17-year low this year to an eight-year high next year.

Freezing temperatures, light showers and light snow will cause some minor slowdowns in harvesting and only minimal harm to the U.S. corn and soybean crops this week, an agricultural meteorologist said on Monday.

"Harvest weather is not perfect but it's not too bad either," said John Dee, meteorologist for Global Weather Monitoring.

(Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Marguerita Choy)