11/07/2012 (Reuters) - Malaysian crude palm oil futures slipped on Tuesday as weak exports signalled consumers might have stocked up well ahead of the Muslim holy month of Ramadan, although losses were capped by dry U.S. weather potentially hurting soy output.

Malaysian palm oil exports for the first 10 days of July slipped 13.5 percent from a month ago, said cargo surveyor Intertek Testing Services, going against expectations that strong Asian demand will push exports higher.

But some in the market are holding out for the Asian festival season in July, starting with Ramadan where fasting in the day is followed by elaborate feasts at night. China and India also celebrate key holidays in September through to November.

Strong Asian demand last month saw Malaysian palm oil stocks fall to a 14-month low, government data showed on Tuesday.

"The market's down on exports today. The numbers were not so good and they surprised everybody," said a trader with a foreign commodities brokerage in Malaysia. "But the U.S. dry weather still plays a part on Malaysian palm oil, that's why there's no sharp retracement downwards."

The benchmark September palm oil futures on the Bursa Malaysia Derivatives Exchange slipped 0.7 percent to close at 3,130 ringgit ($986) per tonne.

Traded volumes stood at 27,643 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.

Technicals were bearish with Reuters market analyst Wang Tao saying palm oil will drop to 3,051 ringgit, as a rebound from the June 14 low of 2,838 ringgit was completed.

China's orders of vegetable oils in June were up 17.4 percent from a month ago, according to government data, a bright spot in overall weakness in imports and signalling some restocking may be in the works.   

Strong demand from China in the next few months could eat into Malaysian stocks that fell 4.9 percent to 1.7 million tonnes.

Lower stocks, and the persistent drought in the U.S. Midwest which has damaged soy crops and limited global oilseed supply, could provide support for futures prices.

Traders were also cautious after Japan's weather bureau said on Tuesday there is a strong possibility the El Nino weather pattern, which is often linked to droughts in Southeast Asia and could hurt palm oil output, will emerge this summer.

Crude oil fell on Tuesday as prospects for demand growth dimmed after Chinese crude imports slowed while supply constraints eased as a Norwegian strike ended.

Other vegetable oil markets also retreated from gains in the previous day. U.S. soyoil for July delivery lost 0.2 percent and the most active January 2013 soyoil contract on the Dalian Commodity Exchange eased 0.5 percent.      

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      JUL2    3139   +13.00    3082    3139     424
  MY PALM OIL      AUG2    3126   -16.00    3090    3143    1693
  MY PALM OIL      SEP2    3130   -23.00    3103    3156   16194
  CHINA PALM OLEIN JAN3    8202   -72.00    8196    8298  237668
  CHINA SOYOIL     JAN3    9786   -42.00    9782    9868  536006
  CBOT SOY OIL     DEC2   55.13    -0.25   54.80   55.67    7383
  NYMEX CRUDE      AUG2   85.50    -0.49   84.62   85.84   28956

  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=3.175 Malaysian ringgit)