* Record soy crops spells trouble for palm in Q2 2013
-trader
* Eighteen percent drop in February's palm oil production
-trader
* Palm oil to rebound into 2,506-2,521 ringgit range
-technicals
(Updates prices, adds details)
By Anuradha Raghu
KUALA LUMPUR, Feb 26 (Reuters) - Malaysian palm oil futures
slipped to a one-month low on Tuesday as weak overseas vegetable
oil markets kept investors on edge, although upbeat export data
helped limit losses.
China and U.S. soy markets, which are tracked by palm,
remained weak after suffering steep falls on Monday and as
better weather in the U.S. Midwest and South America improved
the prospects for supply.
Stronger-than-expected exports in the first 25 days of
February, buoyed by increased shipments of Malaysian palm oil
products to Europe and India, kept prices from tumbling further.
"The cash trade was limited on light-to-moderate demand in
all regions today, but the futures market drew some support from
the 25 days Feb export report," said a trader with a local
commodities brokerage in Malaysia.
The USDA outlook numbers, with projections of a record
soybean crop at 3.4 billion bushels, are bearish, he added.
"This certainly spells trouble for palm oil in the second
quarter of 2013."
By the midday break, the benchmark May contract on
the Bursa Malaysia Derivatives Exchange had inched down 0.8
percent to 2,451 ringgit ($790) per tonne. Prices earlier fell
to 2,448 ringgit, the lowest since Jan. 29.
Total traded volume stood at 12,705 lots of 25 tonnes each,
slightly higher than the usual 12,500 lots.
Technicals showed Malaysian palm oil is expected to rebound
into a range of 2,506-2,521 ringgit per tonne, as a correction
from the Feb. 20 high of 2,584 ringgit could have temporarily
completed, said Reuters market analyst Wang Tao.
Investors are pinning hopes on healthy exports alongside
seasonally slowing production to ease the current 2.58 million
tonne stockpile in Malaysia, the world's No.2 producer.
"At the end of the month we might see an 18 percent drop in
production. And with this kind of exports, we will definitely
see a drawdown in the stocks," said a trader who deals with a
foreign commodities brokerage.
Brent crude futures fell by more than a dollar to one-month
lows below $114 a barrel on Tuesday, hit by worries over demand
growth as a potential political vacuum in Italy revived fears
over instability in the debt-plagued euro zone.
In competing vegetable oil markets, the U.S. soyoil for May
delivery fell 1 percent in early Asian trade. The
most-active September soybean oil contract on the
Dalian Commodity Exchange inched down 0.6 percent.
Palm, soy and crude oil prices at 0520 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR3 2401 -18.00 2400 2422 212
MY PALM OIL APR3 2431 -18.00 2429 2452 1197
MY PALM OIL MAY3 2451 -19.00 2448 2474 6754
CHINA PALM OLEIN SEP3 6786 -26.00 6768 6828 409978
CHINA SOYOIL SEP3 8390 -52.00 8378 8448 402654
CBOT SOY OIL MAY3 49.91 -0.53 49.91 50.50 4882
NYMEX CRUDE APR3 92.46 -0.65 91.92 92.65 8617
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1= 3.104 ringgit)
(Editing by Tom Hogue)
