VEGOILS-Palm ends flat, but posts biggest weekly gain in nearly 4 months

(Recasts lead, adds Wilmar exec quote, adds El Nino element)

* Palm posts 3.4 pct gain this week, biggest in 14

* Prices to consolidate between 2,720-2,700 rgt - trader

* Some weather agencies say El Nino to return in 2014

* Palm oil to retrace to 2,712 ringgit - technicals

By Anuradha Raghu

KUALA LUMPUR, Feb 21 (Reuters) - Malaysian palm oil futures ended flat on

Friday, with prices pressured by losses in competing soyoil markets overseas,

although robust export demand and worries of tighter edible oil supply curbed

losses.

The U.S. soyoil contract for May fell 0.1 percent in late Asian

trade, while the most active May soybean oil contract on the Dalian

Commodities Exchange slipped 0.2 percent.

Weekly benchmark prices, however, rose 3.4 percent, stretching gains into a

third straight week and posting their biggest gain in nearly four months, after

better-than-expected export data and concerns of dry weather squeezing supplies

lifted the market to a 17-month high on Tuesday.

"It's a profit-taking day. The Dalian is not so impressive, U.S. soybean oil

was marginally down in the morning," said a trader with a foreign commodities

brokerage.

"Prices will try to consolidate between 2,720-2,700 ringgit."

The benchmark May contract on the Bursa Malaysia Derivatives

Exchange ended flat on Friday at 2,755 ringgit ($837) per tonne. Trade was

choppy, with prices moving in a 2,720 to 2,758 ringgit range.

Total traded volume stood at 47,313 lots of 25 tonnes, much higher than the

usual 35,000 lots.

Market participants said dry conditions in parts of No.2 producer Malaysia

have hindered the growth of fresh fruit bunches on oil palm trees, leading to a

sharp drop in output this month.

The tropical plant typically needs ample sunshine and water to flourish, and

yields could fall further in the next few months if the weather does not let up,

traders said.

"The weather is seasonally hot this time of the year in Malaysia, Indonesia

and parts of Thailand. But it's hotter and drier this year," the Kuala

Lumpur-based trader said. "It might be the effect of El Nino coming in. I see

output going down, while demand is going up."

The El Nino weather pattern that can trigger drought in some parts of the

world is increasingly likely to return this year, according to scientists,

hitting production of key foods such as rice, wheat and sugar. A strong El Nino

can wither crops in Australia, Southeast Asia, India and Africa when other parts

of the globe such as the U.S. Midwest and Brazil are drenched in rains.

Cargo surveyors reported on Thursday that exports of Malaysian palm oil

products rose about 17 percent in the Feb. 1-20 period from a month earlier,

thanks to bigger demand from top edible oil consumer India.

Robust demand from the biodiesel industry is also slated to give a leg to

palm prices this year, as aggressive biodiesel programmes in top producers

Indonesia and Malaysia soak up supplies and curb exports of the tropical oil.

Biodiesel use in Indonesia could rise to 3.5 million tonnes this year, up

from about 1 million tonnes consumed in 2013, Martua Sitorus, executive deputy

chairman at the world's top palm oil processor Wilmar International

told Reuters.

But technicals showed Malaysian palm oil was expected to retrace to support

at 2,712 ringgit per tonne as it has failed to break resistance at 2,764

ringgit, said Reuters market analyst Wang Tao.

In other markets, Brent crude oil slipped towards $110 a barrel on Friday

but remained on course for its highest weekly close this year, as supply

disruptions in Africa tighten the market.

Palm, soy and crude oil prices at 1027 GMT

Contract Month Last Change Low High Volume

MY PALM OIL MAR4 2777 +12.00 2736 2777 745

MY PALM OIL APR4 2779 +9.00 2739 2779 4732

MY PALM OIL MAY4 2755 +0.00 2720 2758 21723

CHINA PALM OLEIN MAY4 6074 +12.00 6052 6140 372234

CHINA SOYOIL MAY4 6772 -12.00 6764 6830 227842

CBOT SOY OIL MAR4 40.57 +0.00 40.36 40.62 3541

NYMEX CRUDE APR4 102.54 -0.21 102.50 102.92 6761

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 = 3.29 Malaysian ringgit)

(Additional reporting by Rujun Shen in SINGAPORE,; Editing by Prateek

Chatterjee)