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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 two-week high (Updates closing prices)

By Christopher Walljasper

CHICAGO, May 29 (Reuters) - U.S. corn and soybean futures fell on Friday as escalating U.S.-China tensions over Beijing's proposed restrictions on Hong Kong dampened markets after a week of gains.

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

"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 settled 1-3/4 cents lower at $3.25-3/4 a bushel, gaining 2.3% for the week, the largest weekly increase since the week ending Nov. 29, 2019. For the month, corn gained 1.7%, its best since September 2019 and the first monthly gain since December.

CBOT Soybeans dropped 6-1/4 cents to settle at $8.40-3/4 a bushel, moving away from Thursday's two-week high of $8.52-1/4 and finding a weekly lift of 1.7% in its first weekly gain in three weeks. For the month, the oilseed fell 0.9%, a third straight monthly drop.

CBOT wheat added 6-1/4 cents to end at $5.20-3/4 a bushel. For the week, the most active CBOT wheat contract gained 2.4%, the biggest jump since March 27. For the month, the contract fell .7%.

"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, with 192,400 tonnes of old-crop and 200,000 tonnes of new-crop soybeans to China. (Reporting by Christopher Walljasper in Chicago; Additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney; Editing by Tom Brown)

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