23/01/2012 (Reuters) - Malaysian crude palm oil futures inched up in thin trade on Friday on easing worries over the euro zone debt crisis thanks to signs that Greece may be moving closer to a vital debt-swap deal.

Investors were more upbeat as fresh signs from Europe indicated progress in resolving the debt crisis, boosting prospects of global growth and commodity demand.

Worries over wet weather in No.2 producer Malaysia disrupting palm oil production also lifted futures, which are down slightly by 0.3 percent so far this year.

"Mild short-covering is anticipated today as we are on the verge of a long holiday," said a trader with a local commodities brokerage in Malaysia, referring to the Lunar New Year holidays next week.

"Most players will choose to remain on the sidelines, until more is known about global money flow either into or out of the commodity sector," the trader added.

Benchmark April palm oil futures on the Bursa Malaysia Derivatives Exchange rose 0.3 percent to close at 3,165 ringgit ($1,019) per tonne.

Traded volumes were thin ahead of the long weekend at 13,053 lots of 25 tonnes each, compared to the usual 25,000 lots.

Palm oil faces a resistance of 3,179 ringgit, according to charts and technical analysis, said Reuters market analyst Wang Tao.

The Malaysian Meteorological Department issued a warning that heavy rain may cause flash floods in parts of Johor and Sarawak, key oil palm growing states in the country that account for about 30 percent of national output.

Investors are concerned that wet weather may complicate production and distribution of the edible oil, lowering supply and pushing prices up.

But slowing demand as indicated by the latest cargo surveyor data may cap price gains.

Malaysia's palm oil exports for the Jan. 1-20 period fell by 14 percent as top buyers such as China, India and the European markets cut back orders, said cargo surveyor Intertek Testing Services.

Another cargo surveyor Societe Generale de Surveillance said exports for the same period dropped by a steeper 15 percent.

In other markets, Brent crude held steady above $111 on Friday with investors betting oil demand would grow as Europe's funding worries ease amid supply concerns over Iran's tensions with the West.

The U.S. soyoil contract for March delivery inched down 0.4 percent after earlier gains on market optimism. The most active September 2012 soyoil contract on China's Dalian commodity exchange were up 1.3 percent.

"Traders are still worried about the South American weather, which lifted the market up. It might still go up after the Lunar New Year holidays on the weather factor," said Zhang Ru Ming, research manager with Liang Yun Futures.

  Palm, soy and crude oil prices at 1004 GMT
                                                                
  Contract                   Month    Last   Change     Low    High  Volume
  MY PALM OIL           FEB2    3164    -1.00    3161    3181     158
  MY PALM OIL           MAR2    3162    -2.00    3153    3185    2561
  MY PALM OIL           APR2    3165    +8.00    3147    3183    6559
  CHINA PALM OLEIN SEP2    8044   +84.00    7998    8056   49542
  CHINA SOYOIL         SEP2    9054  +116.00    8968    9068  205158
  CBOT SOY OIL         MAR2   50.87    -0.19   50.81   51.23    6828
  NYMEX CRUDE         FEB2   99.44    -0.95   99.44  100.74    2246
                                                                 
  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 = 3.105 ringgit)