GRAINS-Soy retreats from 12-week high on farmer selling

* U.S. soy ends lower, retreats after 12-week top

* Soy falls despite blockbuster U.S. export data

* Selling by funds, farmers pressures soy, corn, wheat

(Recasts with closing U.S. trends, USDA crop progress report)

CHICAGO, Nov 23 - U.S. soybean futures rallied to a 12-week high but reversed and closed lower on Monday as fund buying evaporated and U.S. and South American farmers sold to lock in prices near the highs.

"After the early rally, you saw increased farmer selling, and you did not have the fund buying in there to support the market," said Mario Balletto, an analyst with Citigroup in Chicago.

"Then it started to look like a reversal, and that probably (prompted) more profit-taking and technical selling," he said.

The downturn in soybeans came despite weakness in the dollar, which has tended to spark fund buying in commodities, and a huge weekly soybean export inspections figure from the U.S. Agriculture Department.

USDA reported export inspections of U.S. soybeans in the latest week at 73.8 million bushels, above trade estimates for 54 million to 58 million. The vast majority was earmarked for China.

"It's impressive. I've never seen anything close to that before," Brian Basting of Advance Trading in Bloomington, Illinois, said of the inspections figure.

However, he added, "The expectations and the realizing of this record export program have been built into the market."

Concerns about wet weather in Brazil delaying plantings and rains in the U.S. Midwest that may slow the late harvest underpinned the grain markets, although the Midwest is expected to turn dry by this weekend.

U.S. farmers have nearly wrapped up the soybean harvest. After Monday's close, USDA said 94 percent of the crop had been cut, in line with trade estimates. Farmers have turned their attention to corn, which was 68 percent harvested -- far behind the five-year average of 94 percent.

CORN AND WHEAT ALSO SAG

U.S. corn and wheat also backtracked from early strength, settling lower as funds moved to the sidelines and bearish fundamental news held sway. Corn closed lower for a fifth straight session.

Wheat declined for a fourth session, saddled with a burdensome global supply glut.

CBOT January soybeans settled down 4 cents, 0.38 percent, at $10.42 a bushel. Corn for December delivery was fell 3-3/4 cents or 0.96 percent at $3.87-1/4 a bushel, while CBOT December wheat fell 2-1/2 cents, 0.45 percent, at $5.57-1/4.

Milling wheat futures in Europe tracked the initial upward trend in Chicago prices, with the benchmark January contract in Paris settling up 1.13 percent at 134.50 euros a tonne.

But analysts said corn and wheat markets are burdened by ample supplies and weak demand.

"From the fundamental point of view, wheat looks prone to downside this week. Corn could also fall," said Toby Hassall, an analyst with CWA Global Markets in Sydney.

A global wheat supply glut was highlighted by Australia, which had 3.7 million tonnes of wheat in bulk storage at end-October as farmers began harvesting the 2009/10 crop, around double the stock levels of a year ago. CBOT settlement prices

Last Change Pct 2008 YTD

Chg Close Pct Chg --------------------------------------------------------------- CBOT corn Cc1> 3.8725 -0.0375 -1.0 4.07 -4.9 CBOT soy Sc1> 10.4200 -0.0400 -0.4 9.7225 7.2 CBOT meal SMc1> 315.60 -1.50 -0.5 300.5 5.0 CBOT soyoil BOc1> 0.3940 -0.0031 -0.8 0.3329 18.4 CBOT wheat Wc1> 5.5725 -0.0250 -0.5 6.1075 -8.8 CBOT rice RRc1> 15.2300 0.0600 0.4 15.34 -0.7 EU wheat BL2F0> 134.50 1.5 1.1 137 -1.8 US crude CLc1> 77.45 -0.02 0.0 44.60 73.7 Dow Jones .DJI> 10451 133 1.3 8776 19.1 Gold XAU=> 1162.80 -3.05 -0.3 878.20 32.4 Euro/dollar EUR=> 1.4962 -0.0002 0.0 1.3978 7.0 Dollar Index .DXY> 75.1280 -0.5280 -0.7 81.1510 -7.4 Baltic Freight .BADI> 4423 -84 -1.9 774 471 *Front month contracts. CBOT contracts in cents per bushels except rice which is in dollars per hundredweight. Paris wheat in euros a tonne and London wheat in pounds per tonne (Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris; Editing by Marguerita Choy) ((julie.ingwersen@thomsonreuters.com; +1 312-408-8720; Reuters Messaging: julie.ingwersen.reuters.com@reuters.net)) (