11/05/2012 (Reuters) - Malaysian palm oil futures edged up on Thursday, as traders bet on lower palm oil stocks, although gains were capped by lingering euro zone fears and slower exports of the edible oil this month.

The market, which has gained nearly 5.5 percent so far this year, drew support from an industry report that showed palm oil stocks in No.2 producer Malaysia fell to a one-year low.

But trading was volatile this week after polls in France and Greece threatened to put euro zone bailout programme at risk, while the latest Chinese trade data showed signs that the world's No.2 economy could be slowing down.

There could be some price declines in the days to come after cargo surveyor Societe Generale de Surveillance reported a 14.2 percent drop in May 1-10 Malaysian palm oil exports compared to a month ago, suggesting the slowing economy may be curbing demand.

"The market is looking at the MPOB (Malaysian Palm Oil Board) report today, market is a little bit positive on that," said a trader with a foreign commodities brokerage in Malaysia.

"Because of external factors such as emerging issues in Europe, the market has been very uncertain. The USDA (U.S. Department of Agriculture) report will add to the volatility too, market should be trading in the 3,300-3,400 ringgit range for the next two days." 

Benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.4 percent to close at 3,349 ringgit ($1,093) per tonne.

Traded volumes stood at 27,230 lots of 25 tonnes each, higher than the usual 25,000 lots as volumes picked up after the midday break.

Malaysia's April palm oil stocks fell 5.4 percent to 1.85 million tonnes from a month ago, said industry regulator Malaysian Palm Oil Board after the midday break.

While that puts stock level slightly higher than the expected 1.82 million tonnes, it is still at a one-year low and likely to push palm oil prices higher.

Malaysian palm oil exports for May 1-10 fell by 6 percent compared to a month ago, said another cargo surveyor Intertek Testing Services, reflecting lower demand from major food buyer China and India.

Market players are watching the monthly planting report for soybeans that will be issued by the U.S. Department of Agriculture later on Thursday. A smaller soybean crop for crushing into competing soybean oil will support palm oil prices.

Singapore's Wilmar International Ltd, the world's largest listed palm oil firm, posted a surprise 34 percent drop in quarterly earnings on Thursday, hurt by losses at its largely China-based oilseeds and grains business.

Oil fell to around $113 per barrel on Thursday, pressured by weaker-than-expected Chinese trade data highlighting concerns over energy demand in the world's second-largest oil consumer.

In other vegetable oil markets, the most active U.S. soyoil contract for July gained 1.1 percent while the most active Dalian soyoil September contract also gained 0.9 percent.   

  Palm, soy and crude oil prices at 1005 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAY2    3370   +35.00    3344    3380     216
  MY PALM OIL      JUN2    3360   +20.00    3343    3391    1726
  MY PALM OIL      JUL2    3349   +14.00    3330    3384   16349
  CHINA PALM OLEIN SEP2    8650  +112.00    8542    8662  236426
  CHINA SOYOIL     SEP2    9750   +84.00    9662    9764  468710
  CBOT SOY OIL     JUL2   53.38    +0.56   52.90   53.55   13402
  NYMEX CRUDE      JUN2   96.12    -0.69   96.08   96.92   19751

  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 = 3.065 ringgit)