* Trump-Xi summit later this week in focus

* Fertilizer price jump to affect low-income EM beyond

this year

* Mexico policymaker says Iran war risks contained right

now

* Ukraine bonds jump between 1-2 cents on the dollar on

peace hopes

(Updates with afternoon trading levels)

By Purvi Agarwal, Johann M Cherian and Avinash P

May 11 (Reuters) - Most Latin American currencies were

steady and stocks were mixed on Monday after logging gains in

the previous week, while investors exercised caution as peace

talks in the Middle East hit an impasse and threat of a

potential escalation loomed.

MSCI's index tracking LatAm currencies was flat as investors

avoided large bets, although it was hovering

near a record high.

Brazil's real, Mexico's peso and Peru's sol

were flat, while the pesos of Chile and Colombia

dipped 0.79% and 0.54%, respectively.

President Donald Trump said that a ceasefire with Iran was

"on life support" after he rejected Tehran's response to a U.S.

peace proposal, fuelling concerns of a resumption of hostilities

and sending oil prices up over 3%.

A prolonged conflict is also threatening food security and

is increasing credit risks in lower-income emerging markets,

especially in Asia and Africa as costs for fertilizers soar.

In Latin America, Argentina wheat harvests are also

threatened by higher fertilizer prices.

A sizeable chunk of fertilizer is exported through the

Middle East and prices are expected to remain elevated even in

the case of an immediate resumption of flows.

"The consequences could also have longer-reaching

implications not for this harvest, but the next harvest, given

the time frames and supply chain disruption that we're now

talking about," said Benjamin J Young, managing director at S&P

Global Ratings.

The spotlight later this week will shift to Trump's meeting

with his Chinese counterpart Xi Jinping, with trade and Iran

among the items on the agenda at the summit between the world's

two largest economies.

In Latam, MSCI's equities benchmark slipped

0.63%, dragged down by a 1.28% fall in Brazilian stocks.

Offsetting some losses was Embraer's ( EMBJ ) 1% gain

after the Brazilian planemaker was in talks with Colombia and

Chile for potential orders of its C-390 military transport

aircraft.

Argentine equities gained 1.85%, while Peruvian

stocks added 1.1%.

Peru's government has authorized state-run oil firm

Petroperu to seek $2 billion in state-insured

loans to ensure the continuity of its operations, according to

an emergency decree.

Mexican stocks edged up 0.65%. Local central bank

Governor Victoria Rodriguez said inflationary risks in the

economy were contained at the moment and monetary policy should

not react to transitory, limited supply shocks.

The country's central bank delivered a widely expected 25

basis-point cut last week, but indicated it was the last of its

easing cycle started in 2024.

On the data front, Colombia's consumer prices rose 0.78% in

April, taking cumulative 12-month price growth to 5.68%. Local

stocks added 0.26%.

Brazil and Colombia head to elections this year, in October

and May respectively, and analysts wait to see if a

market-friendly government can consolidate, which could boost

capital flows into local assets.

Elsewhere, Ukraine's bonds jumped between 1-2 cents on the

dollar each on Monday. Russian President Vladimir Putin said

over the weekend that he thinks the Russia-Ukraine warwas coming

to an end.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

MSCI Emerging Markets 1723.21 0.7

MSCI LatAm 3184.92 -0.63

Brazil Bovespa 181746.53 -1.28

Mexico IPC 70308.56 0.65

Chile IPSA 10732.54 -0.25

Argentina Merval 2820349.8 1.85

9

Colombia COLCAP 2128.2 0.26

Brazil real 4.8953 -0.04

Mexico peso 17.1922 -0.18

Chile peso 897.06 -0.54

Colombia peso 3767.5 -0.79

Peru sol 3.4315 0.07

Argentina peso (interbank) 1391 0.54

Argentina peso (parallel) 1385 1.08