GRAINS-Chicago grains ease as Trump tariff plan hangs over market

Updates at 1224 GMT, changes byline/dateline

By Gus Trompiz and Naveen Thukral

PARIS/SINGAPORE, Jan 31 (Reuters) - Chicago corn, soybean and wheat futures fell on Friday as looming U.S. tariffs against Canada and Mexico created uncertainty over trade repercussions and encouraged traders to book profits after rallies in grains this month.

U.S. President Donald Trump's threat to impose 25% tariffs on imports from Mexico and Canada from Saturday, if the two countries do not stem the flow of illegal migrants and the drug fentanyl into the United States, weighed on commodity prices and supported the dollar. MKTS/GLOB

"In addition to the traditional month-end profit-taking, caution is set amid the risk of a trade war between the United States and its main trading partners," Argus analysts said.

Worries over potential trade tensions shifted attention away from weather risks for corn and soy crops in South America and ebbing wheat export supply in Russia.

Drought in Argentina and heavy rain in Brazil have contributed to gains for corn and soybean prices during January, though weather charts pointing to some showers in Argentine crop belts in early February have tempered concerns.

Weekly U.S. soybean export sales on Thursday below analysts' expectations added to demand doubts as traders watched to see if the U.S. government would also target China, the world's biggest soybean importer, with new tariffs.

The most active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was down 0.6% at $10.37-3/4 a bushel by 1224 GMT, while CBOT corn Cv1 fell 1.8% to $4.81-1/2 a bushel.

Corn was retreating from a 15-month peak struck on Wednesday while soybeans were moving away from a six-month top hit last week.

CBOT wheat Wv1 was 1.9% lower at $5.55-3/4 a bushel after reaching a two-month high on Thursday.

Lower export forecasts and rising prices in Russia, as well as concerns that severe cold may have harmed U.S. wheat crops, have lent support to the wheat market this week, countering pressure from slow international demand.