13/11/2012 (Reuters) - Malaysian palm oil futures recovered after falling to their lowest in three years on Monday, as a rise in Malaysian palm oil stocks in October missed market expectations and signalled a slowdown in inventory buildup.

Prices fell to 2,220 ringgit ($725) per tonne before the midday break, a level last seen in November 2009, tracking steep drops in Dalian soybean oil and U.S. soybeans after a larger-than-expected production forecast from the U.S. Department of Agriculture (USDA) on Friday.   

But the benchmark January contract on the Bursa Malaysia Derivatives Exchange closed up 0.4 percent at 2,324 ringgit after industry regulator the Malaysian Palm Oil Board reported a 1.1 percent increase in palm oil stocks to a record 2.51 million tonnes. 

The rise missed market expectations that stocks in the world's No.2 palm oil producer likely climbed 7.5 percent to 2.67 million tonnes.

"It is very bullish. Nobody expected this figure. Nobody. We were expecting a bigger glut than usual in stocks," said a trader with a foreign commodities brokerage in Malaysia.

Total traded volumes stood at 48,969 lots of 25 tonnes each, much higher than the usual 25,000 lots despite expectations for a quiet market ahead of the Diwali and Awal Muharram holidays in Malaysia this week.   

Market participants will be looking out for Malaysia's Nov. 1-10 exports data from Societe Generale de Surveillance later, after another cargo surveyor Intertek Testing Services reported on Saturday a 16 percent rise from the previous month.  

In a bearish sign for palm oil, crude oil eased towards $109 per barrel on Monday, as concerns about the looming U.S. fiscal cliff and weak economic data from Japan offset signs that Chinese oil demand grew last month.  

In other vegetable oil markets, U.S. soyoil for December delivery was down 0.7 percent in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 3.9 percent lower, after earlier hitting its 4-percent daily limit.  

  Palm, soy and crude oil prices at 1020 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      NOV2    2240    -9.00    2200    2240      26
  MY PALM OIL      DEC2    2293   -21.00    2190    2294    1743
  MY PALM OIL      JAN3    2324    +8.00    2220    2330   20822
  CHINA PALM OLEIN MAY3    6554  -198.00    6482    6630  735930
  CHINA SOYOIL     MAY3    8348  -342.00    8344    8518 1031644
  CBOT SOY OIL     DEC2   47.45    -0.32   46.52   47.74   17579
  NYMEX CRUDE      DEC2   85.92    -0.15   85.58   86.29   15884

  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=3.06 ringgit)