29/11/2012 (Reuters) - Malaysian palm oil futures eased on Wednesday, dropping for a second straight session on concerns that U.S. fiscal woes could hamper global economic growth and commodity demand.

Prices touched their highest in almost a week on Tuesday as a Greek debt deal provided brief comfort for investors, but lack of progress in U.S. budget talks and speculation that Malaysian palm oil inventories could hit a record high this month kept prices in a tight range.

"The market looks like it's expected to just stay rangebound this week," said a Singapore-based trader with a global commodities trading house. "But for the longer term, sentiment has improved, compared to a month ago."

The benchmark February contract on the Bursa Malaysia Derivatives Exchange fell 0.7 percent to close at 2,394 ringgit ($784) per tonne. Prices traded in a range of 2,383 to 2,417 ringgit.

Total traded volumes stood at 31,818 lots of 25 tonnes each, higher than the usual 25,000 lots. 

Technicals showed mixed signals for palm oil, but it is biased to drop to 2,353 ringgit per tonne, said Reuters market analyst Wang Tao.  

Malaysian palm oil stocks hit a record high in October at 2.51 million tonnes on seasonally high production. While some traders said slower output this month may ease pressure on the stockbuild, concerns remained that export demand might not be enough to reduce stocks.

Cargo surveyors showed a slight drop in shipments in the first 25 days of November from a month ago. 

The European Commission has made public a decision taken last week to allow palm oil producers under the Roundtable on Sustainable Palm Oil scheme to qualify for biofuel subsidies, a move that could spur more European demand for the tropical oil.

In other markets, Brent oil slipped on Wednesday as investors nervously eyed talks to head off a looming fiscal disaster in the United States, the world's top oil consumer.

The U.S. budget woes also weighed on other vegetable oil markets. U.S. soyoil for December delivery fell 0.7 percent in early trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.4 percent lower.

The market also took note of Olam International's  detailed defence on Wednesday against short-seller Muddy Waters' attacks on its accounting practices and acquisitions, emphasising it was not at risk of insolvency.  

Shares of the Singapore commodities firm tumbled as much as 6 percent to a three-and-a-half year low, but later recouped some losses. 

  Palm, soy and crude oil prices at 1004 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      DEC2    2160   -18.00    2135    2165     243
  MY PALM OIL      JAN3    2326   -29.00    2323    2365    4187
  MY PALM OIL      FEB3    2394   -16.00    2383    2417   14337
  CHINA PALM OLEIN MAY3    6740   -98.00    6730    6860  724406
  CHINA SOYOIL     MAY3    8576   -32.00    8550    8664  719364
  CBOT SOY OIL     JAN3   50.09    -0.32   49.92   50.49   10880
  NYMEX CRUDE      JAN3   87.05    -0.13   86.87   87.34   11432

  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=3.05 ringgit)