GRAINS-Chicago grains slip on fears of tariff retaliation

By Gus Trompiz and Ella Cao

PARIS/BEIJING, April 3 (Reuters) - Chicago soybean, corn and wheat futures slid on Thursday amid concerns that new U.S. tariffs could trigger retaliatory measures against U.S. exports, though losses were limited by a weaker dollar and relief that U.S. duties were not higher.

President Donald Trump on Wednesday announced a 10% baseline tariff on most imports to the U.S., with higher duties on dozens of trading partners including China and the European Union.

The plan sent share and oil prices falling as investors feared a global recession, while grain traders saw scope for disruption to U.S. agricultural exports, particularly soybeans.

"Punitive new tariffs have spooked investors and it's weighing on agriculture, energy, and metals futures this morning," Peak Trading Research said in a note.

The most-active soybean contract Sv1 on the Chicago Board of Trade was down 2.1% at $10.07-3/4 a bushel by 1116 GMT.

CBOT wheat Wv1 dropped 2.4% to $5.26-1/2 a bushel, while corn Cv1 lost 1.8 to $4.46-3/4 a bushel.

Traders were watching to see if U.S. soybeans would be targeted in turn by China, the world's biggest soybean importer, and the EU, another big buyer of U.S. soy.

"For soybeans, China and the EU combined is big," a European trader said. "But a lot was already priced in before (Trump's announcement) and the weaker dollar is helping too."

The dollar index slid along with other financial markets, making U.S. commodities cheaper internationally. FRX/

Some traders took comfort in continuing tariff exemptions for the top trading partners of the U.S., Mexico and Canada, and the 10% baseline tariff level set by Trump.

"Most of the tariffs have turned out to be more of a fizzle than a bang. What was initially proposed as a blanket 20% tariff has been reduced to just 10%, which is manageable for most nations," said Ole Houe of IKON Commodities in Sydney.

Grain markets will be watching weekly export sales data from the U.S. Department of Agriculture later on Thursday for clues as to the impact of tariff uncertainty.

As farmers in the U.S. Midwest prepare to plant corn and soybeans, crop weather is also being closely monitored.

Heavy showers and thunderstorms have caused wind damage, large hail, and flash flooding in the Corn Belt, according to a USDA report.