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GRAINS-Corn futures rally on U.S. weather concerns, soybeans slip as China halts U.S. ag purchases

* Excess moisture in U.S. Midwest gives boost to corn futures

* Soybeans drop on China halting U.S. agricultural purchases

* Wheat slips on technical buying (Updates with closing prices, adds analyst comments,)

By P.J. Huffstutter

CHICAGO, Aug 5 (Reuters) - Volatility roiled the commodity grain futures markets on Monday, as uncertainty in the U.S. weather forecast supported corn and the growing tensions in the U.S.-China trade war weighed on soybeans.

Wheat futures ended the day up on technical buying, traders said.

China's Commerce Ministry said that Chinese companies have stopped buying U.S. agricultural products, and that China will not rule out imposing import tariffs on U.S. farm products that were bought after Aug. 3.

The moves by China represent the latest escalation in its trade dispute with the United States, and come after China let the yuan weaken beyond the key 7-per-dollar level on Monday for the first time in more than a decade.

U.S. President Donald Trump last week said he would impose an additional 10% tariff on $300 billion worth of Chinese imports starting Sept. 1, citing insufficient progress in trade talks between the world's two largest economies. The market mostly shrugged off Beijing saying earlier in the day that it would honor its pledges to buy U.S. agricultural products.

Traders said the news about China halting purchases - along with a weaker Brazilian currency, potentially making South American supplies more attractive to oilseed importers - dragged on soybean futures for much of the day.

The most active Chicago Board of Trade (CBOT) soybean contract touched to the lowest price since June 12 in midday trading, after finishing last week down more than 3%. The contract settled Monday up 1/4 cent at $8.68-3/4 a bushel.

The China development reverberated in hog futures, with Chicago Mercantile Exchange October lean hog futures swinging nearly limit-up and -down in the same trading session.

"It's all panic trading right now," said Dan Norcini, an independent livestock trader based in Idaho.

CORN AND WEATHER

Forecasts of cooler and wetter conditions across the U.S. Midwest raised new concerns about how much of the current crop might be lost - as well as how much of the corn and soybean yields might be hampered by the stress of excess moisture.

"Everyone is focusing on the dramatic weather right now," said Dan Basse, president of Chicago-based consultancy AgResource Co. "People are starting to buy back their position in expectation of the crops being damaged."

Crops in as much as 30% of the Midwest are at significant risk of rain-related stress in the coming days, particularly in the Plains and portions of the western Midwest, according to a Commodity Weather Group report on Monday.

But limited rains and warmer patterns could impact corn and soybean fields in areas that have been far drier, including parts of Illinois, Indiana and Ohio.

The most active CBOT corn contract settled the day up 5-1/4 cents at $4.14-3/4 a bushel.

CBOT most active wheat contract closed the day up 3-3/4 cents at $4.94-1/2 a bushel.

(Reporting by P.J. Huffstutter in Chicago Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore Editing by Marguerita Choy and Matthew Lewis)

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