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GRAINS-Soybeans hit seven-month low after Trump tariff threat against China

* Trump says to raise tariffs on $200 bln of Chinese goods * U.S. president's move unsettles investors expecting deal * Soybeans are biggest U.S. farm export to China * Corn also slides after rallying last week on U.S. weather (Updates with European trading, changes byline/dateline) By Gus Trompiz and Emily Chow PARIS/KUALA LUMPUR, May 6 (Reuters) - Chicago soybeans fell sharply on Monday to their lowest in over seven months after U.S. President Donald Trump said he would raise tariffs on Chinese goods this week, clouding prospects for a trade settlement between the world's two largest economies. The U.S. tariff threat, which sparked broad selling on equity and commodity markets, added to recent pressure on soybeans linked to expectations that U.S. farmers will switch some area from corn to soybeans. Corn, which rallied last week as rain hampered planting in the U.S. Midwest, also fell sharply as the renewed trade tensions between Washington and Beijing cooled hopes of a deal that would boost U.S. grain exports to China. U.S. wheat also fell. Trump said on Sunday that tariffs on $200 billion of goods would increase to 25 percent on Friday, reversing a decision he made in February to keep them at 10 percent due to progress in trade talks. The president also said he would target a further $325 billion of Chinese goods with 25 percent tariffs "shortly", essentially covering all products imported into the United States from China. The announcement upset expectations that the sides were near an agreement to resolve a trade standoff, although China said on Monday that a delegation was still preparing to go to the United States for a new round of talks. "This (tariff threat) could provoke the standstill of the current negotiations and defer the hopes to see China resuming its purchases of U.S. agricultural products, especially soybeans," consultancy Agritel said. Soybeans are the most important U.S. agricultural export to China. Pledges by Beijing to increase imports of U.S. farm goods had raised expectations it would also start buying significant amounts of U.S. corn and wheat. The most-active soybean futures on the Chicago Board of Trade were down 1.9 percent at $8.26 a bushel by 0937 GMT, on track for a seventh straight session of losses. The contract earlier fell to $8.22-1/4, the lowest since Sept. 19. CBOT corn was down 2.1 percent at $3.63 a bushel, while CBOT wheat lost 1.4 percent at $4.31-3/4. Corn looked set to break an eight-session rally fuelled by concerns over lost plantings and reduced yield potential due to excess moisture this spring. More rain is expected around the U.S. Midwest this week, which could further hamper corn planting and raise the chances of some land being switched to later-planted soybeans. Traders await the U.S. Department of Agriculture's weekly crop progress report later on Monday to gauge the extent of planting delays. Prices at 0937 GMT Last Change Pct End Ytd Pct Move 2018 Move CBOT wheat 431.75 -6.25 -1.43 503.25 -14.21 CBOT corn 363.00 -7.75 -2.09 375.00 -3.20 CBOT soy 826.00 -16.25 -1.93 895.00 -7.71 Paris wheat May 183.25 -2.25 -1.21 205.00 -10.61 Paris maize Jun 166.00 -0.75 -0.45 184.50 -10.03 Paris rape May 362.50 -2.50 -0.68 362.25 0.07 WTI crude oil 60.96 -0.98 -1.58 45.41 34.24 Euro/dlr 1.12 0.00 -0.10 1.1469 -2.44 Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne (Reporting by Gus Trompiz in Paris and Emily Chow in Kuala Lumpur; Editing by Dale Hudson)

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