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GRAINS-Wheat set for best weekly gain in 4 months on global harvest worries

* Wheat set to finish week up more than 6%

* Corn steady, set for weekly gains

* Soybeans edge higher

By Colin Packham

SYDNEY, July 10 (Reuters) - Concerns about global supply set U.S. wheat futures on track for a weekly gain of more than 6%, though the grain dipped on Friday as traders squared positions ahead of a widely watched government report that is expected to trim output estimates.

Earlier in the session, the grain leapt to its highest prices in more than two months as the latest crop estimates in major exporting countries such as Argentina, France and Russia raised questions about global supply.

Corn was also set for a weekly gain, while soybeans edged higher.

The most-active wheat futures on the Chicago Board Of Trade inched down 0.2% at $5.23-3/4 a bushel, after firming 1.6% to an April 28 high of $5.31 a bushel late Thursday.

Analysts said the outlook for global production was weighing on prices, although Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia said he did not believe the rally could be sustained.

"We are sceptical that we are in for a sustained rally. But nor are we in agreement with the bearish 'there's oodles of wheat in the world'," Gorey added.

Investors were also on the watch for the United States Department of Agriculture's (USDA) production report due later in the day.

Analysts expect the USDA to trim its estimate for U.S. wheat production in the latest cut to global harvest estimates from crop forecasters around the world.

Traders and analysts have also been anticipating a sharp drop in wheat production, although most estimates have pegged the 2020 harvest at 32 million-33 million tonnes.

The most-active soybean futures were up 0.1% at $9.02-1/4 a bushel after closing 0.5% higher in the previous session.

Soybeans are poised for a weekly gain of more than 0.5%, their second consecutive rise.

The most active corn futures were unchanged at $3.57 a bushel after closing up 0.5% on Thursday.

Corn was set to advance 1% for the week, their second straight weekly gain.

Analysts on average expect the USDA on Friday to lower its forecasts for U.S. 2020/21 corn production and ending stocks, according to a Reuters poll. (Reporting by Colin Packham, Editing by Sherry Jacob-Phillips)

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