22/02/2013 (Reuters) - Malaysian palm oil futures slipped on Thursday, tracking weak U.S. and China vegetable oil markets and as investors booked profits from prices which have gained almost two percent so far this week.

U.S. soy prices slid on Thursday from a selloff in commodities amid speculation that a hedge fund had been forced to liquidate assets, rattling sentiment across major commodity markets and weighing on palm prices.

But major losses in palm oil were prevented by hopes that seasonally slowing output in Malaysia, the world's No.2 producer, will help ease stocks despite sluggish exports.

"At the end of the month exports may be slightly down compared to January, but it will not have much impact because production is slowing by more than ten percent," said a trader with a foreign commodities brokerage in Malaysia.

"I think there will be a slight drawdown in end-stocks again," the trader added. Inventory levels in January had inched down 1.9 percent from record highs of 2.63 million tonnes.

"For today, the immediate support is 2,500 ringgit and resistance is 2,550 ringgit. There is a bit of profit taking and market correction."

The benchmark May contract on the Bursa Malaysia Derivatives Exchange slipped 1.1 percent to close at 2,536 ringgit ($814) per tonne. Prices traded in a tight range between 2,513 and 2,543 ringgit.

Total traded volumes stood at 16,996 lots of 25 tonnes each, lower than the typical 25,000 tonnes.

Technicals showed a bullish target at 2,620 ringgit per tonne will only be valid when Malaysian palm oil climbs above a resistance at 2,593 ringgit, said Reuters market analyst Wang Tao.

Palm oil products shipped in the first twenty days of the month showed signs of slowing down from robust exports in earlier weeks, cargo surveyors data showed on Wednesday.

Oil extended the previous session's decline on Thursday to a three-week low on concern the U.S. Federal Reserve might stop its stimulus program sooner than thought and on the prospect of a rise in Saudi Arabian oil output.

In other vegetable oil markets, the U.S. soyoil for May delivery fell 0.4 percent in early Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange closed 1.4 percent lower.   

  Palm, soy and crude oil prices at 1004 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAR3    2481   -28.00    2470    2485     374
  MY PALM OIL      APR3    2510   -30.00    2490    2517    1519
  MY PALM OIL      MAY3    2536   -29.00    2513    2543   11033
  CHINA PALM OLEIN SEP3    7024  -114.00    6964    7086  568116
  CHINA SOYOIL     SEP3    8630  -124.00    8610    8700  478316
  CBOT SOY OIL     MAR3   51.75    -0.32   51.54   51.98    5269
  NYMEX CRUDE      APR3   93.87    -1.35   93.55   94.92   32279

  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=3.11 ringgit)