15/02/2013 (Reuters) - Malaysian palm oil futures edged down to a two-week low on Thursday, as data showed stockpiles in the world's No.2 producer remained high and on improving weather in key soy-growing regions in South America.

Better South American weather would contribute to an expected bumper crop in Brazil, poised to overtake the United States as the No.1 soybean grower, adding pressure to the soybean market tracked by palm oil.

January's palm oil end-stocks eased off record levels and fell to 2.58 million tonnes, according to industry regulator data, but the smaller-than-expected decline triggered some selling pressure in the market.

"While good export news continues to come in, nervousness about the large South American crop (and its effect on prices), as well as the U.S. soybean market facing a seasonal slowdown are pressuring the futures market," said a trader with a local commodities brokerage in Malaysia.

"The end-stocks are still the elephant in the room. Traders could be taking the end-stocks seriously and are looking for opportunities to sell," the trader added.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged down 0.3 percent to close at 2,497 ringgit ($811) per tonne. Prices went as low as 2,490 ringgit, the lowest level since Jan. 30.

Total traded volumes stood at 20,263 lots of 25 tonnes each, slightly lower than the average of 25,000 tonnes. Technical analysis showed palm oil is expected to drop further to 2,460 ringgit per tonne, as it has fallen below support at 2,510 ringgit, said Reuters market analyst Wang Tao.

Cargo surveyor data showed Malaysia's exports of palm oil products rose as much as 25 percent in the first 10 days of February on stronger demand from major buyers India, China, the United States and Europe. 

Traders will be looking out for Feb. 1-15 export data on Friday to further gauge demand trend of the tropical oil.

Analysts say seasonally slowing production could see stockpiles in February easing another 4 percent on the month to 2.48 million tonnes, but inventory levels are unlikely to dip below the 2-million-tonne mark in the first quarter of 2013.

"This should keep crude palm oil prices below 3,000 ringgit per tonne in the first quarter of 2013," said Kenanga Research  analyst Alan Lim in Kuala Lumpur.

India's vegetable oil imports soared 27.4 percent from a month earlier to hit an all-time high in January on record purchases of cheap palm oil from southeast Asia, a trade body said on Thursday, despite a hike in import duties mid-month.

Oil prices rose on Thursday as fresh tensions over Iran's nuclear programme revived global supply concerns, offsetting weaker-than-expected growth data from France and Germany.

In competing vegetable oil markets, U.S. soyoil for March delivery dropped 0.3 percent in late Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.    

  Palm, soy and crude oil prices at 1008 GMT
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      FEB3    2456   +11.00    2455    2456      35
  MY PALM OIL      MAR3    2478    -6.00    2471    2512    1414
  MY PALM OIL      APR3    2497    -8.00    2490    2532    9594
  CHINA PALM OLEIN SEP3    7088   -24.00    7082    7156  307504
  CHINA SOYOIL     SEP3    8714   -42.00    8712    8788  218624
  CBOT SOY OIL     MAR3   51.48    -0.18   51.37   51.75    5559
  NYMEX CRUDE      MAR3   97.16    +0.15   96.94   97.39    9412

  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=3.089 ringgit)