27/04/2012 (Reuters) - Malaysian palm oil futures slipped on Thursday as global economic uncertainty and expectations of improving production weighed on the market, although recovering exports and a smaller soybean crop in Argentina limited losses. 

Despite the Federal Reserve's assurance that its very easy monetary policy will be kept in place for as long as needed, investors remained sceptical, worrying that the lingering euro zone debt crisis could slow growth and dampen demand.     

"The underlying fundamentals still look quite good. Market is down as traders expect production should pick up in the month ahead. Another thing is economic concerns may be eating into demand," said James Ratnam, an analyst with TA Securities in Malaysia. 

Benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to close at 3,500 ringgit ($1,146) per tonne. 

Traded volumes stood at 29,661 lots of 25 tonnes each, higher than the usual 25,000 lots. 

Malaysian palm oil exports for the first 25 days of the month dropped a slight 2 and 3 percent, according to cargo surveyors Societe Generale de Surveillance and Intertek Testing Services respectively.         

Despite the fall, market players see the numbers as an improvement compared to the 5 percent decline seen in the first 20 days of the month. Traders said that demand from major food buyers China and India has been picking up, contributing to stronger buying interest in the edible oil. 

Shipments to Europe were also higher compared to a month ago as demand from the biodiesel industry returned after winter. Hamburg-based oilseeds analyst Oil World this week cut its forecast for Argentina's 2012 soy output to 42.5 million tonnes, reinforcing views of a tight global oilseed supply.

Reuters market analyst Wang Tao had a bearish view, saying palm oil will clear a support at 3,439 ringgit per tonne and fall further to 3,395 ringgit.  

Oil inched above $119 a barrel on Thursday, as optimism over a recovery in the U.S. economy offset the impact of rising global supplies.  

The most active U.S. soyoil contract for May edged up 0.1 percent in late Asian trade, reversing earlier losses, while the most active Dalian soyoil September contract was down 0.1 percent.      

  Palm, soy and crude oil prices at 1004 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAY2    3502   -11.00    3482    3519     557
  MY PALM OIL      JUN2    3516    +0.00    3484    3525    4014
  MY PALM OIL      JUL2    3500   -11.00    3474    3514   17887
  CHINA PALM OLEIN SEP2    8774   -16.00    8726    8788  270504
  CHINA SOYOIL     SEP2    9932   -12.00    9904    9958  421744
  CBOT SOY OIL     JUL2   56.08    +0.05   55.72   56.14    9904
  NYMEX CRUDE      JUN2  103.92    -0.20  103.86  104.47   11795

  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 = 3.053 ringgit)