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GRAINS-Corn, soybeans slide on U.S.-China tensions

* Corn dips after four day climb, Midwest weather risks for wheat

* Soybeans curbed by U.S.-China tensions after 2-week high (New throughout, changes byline, previous dateline PARIS/SYDNEY)

By Christopher Walljasper

CHICAGO, May 29 (Reuters) - U.S. corn and soybean futures fell on Friday as percolating U.S.-China trade tensions over Beijing's proposed restrictions on Hong Kong put a damper on the markets after a week of positive movement, with U.S. President Donald Trump expected to address the situation later on Friday.

Three sources told Reuters China may reduce its imports of U.S. agricultural products if Washington issues a severe response to Beijing's push to impose national security laws on Hong.

"It's been a headline trading day, with uncertainty over U.S.-China relations," said Terry Reilly, senior agriculture futures analyst at Futures International.

Wheat, however, edged higher as traders assessed forecasts for warm, dry weather in the U.S. Plains and reduced harvest estimates in Europe following a dry spring.

The most active corn futures on the Chicago Board Of Trade were down 4 cents at $3.23-1/2 a bushel by 11:10 a.m. (1710 GMT), after Thursday's one-month high of $3.30-3/4.

CBOT Soybeans dropped 5-1/4 cents to $8.41-3/4 a bushel, moving away from Thursday's two-week high of $8.52-1/4.

CBOT wheat added 6-1/4 cents to $5.20-3/4 a bushel.

Corn futures fell despite a fourth straight weekly increase in ethanol production, according to data on Thursday, signaling an increase in consumption of the corn-based fuel as states begin to loosen coronavirus restrictions.

"We probably would have got some follow through today, if not for the overhanging negativity from the China situation," said John Zanker, marketing analyst at Risk Management Commodities.

The U.S. Department of Agriculture reported export sales below analysts' expectations, dampening hopes China would meet its purchase commitments under a U.S. trade deal. USDA reported 192,400 tonnes of old-crop and 200,000 tonnes of new-crop soybeans to China, and no new corn sales to the country. (Reporting by Christopher Walljasper in Chicago; Additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney; Editing by Richard Chang)

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