21/07/2012 (Reuters) - Malaysian crude palm oil futures ended lower on Friday, as expectations of higher palm oil stocks in Malaysia offset concerns over crop-damaging weather in the U.S. Midwest that lowered soybean oil supply.

Palm oil futures posted an 0.8 percent weekly loss, as weather-driven gains were capped by weak exports and higher production in No.2 producer Malaysia, which could push stocks up in July after they fell to a 14-month low last month.

"From the inventory level alone, it is negative to prices. But the dry season in the United States is still very much in the picture," said Alan Lim, research analyst with Malaysia's Kenanga Investment Bank.   

The benchmark October palm oil futures on the Bursa Malaysia Derivatives Exchange were down a slight 0.1 percent to close at 3,042 ringgit ($965) per tonne.

Traded volumes stood at 25,325 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.

Malaysia's palm oil exports fell 23 percent over the July 1-20 period from a month ago, cargo surveyors Intertek Testing Services and Societe Generale de Surveillance said.

Slower exports, coupled with higher output expected for July, could boost palm oil stocks and ease concerns about tight oilseeds supplies.

Late on Thursday, India lifted a six-year-old freeze on the base import price of refined palmolein, a move that will make palm oil imports from Indonesia more costly.  

Traders said the move to protect domestic refiners could support crude palm oil prices as the demand outlook for the feedstock brightens.    

The move, which effectively doubled import taxes on refined products of the edible oil, could also see a drop in exports and push rival Malaysia to overhaul its taxes.

In related market, Brent crude slipped below $107 per barrel on Friday as worries about a conflict in the Middle East eased slightly, lowering palm oil's appeal to be used as an alternative for biofuel.

In other vegetable oil markets, the most active U.S. soyoil for December delivery was almost flat while the most active January 2013 soyoil contract on the Dalian Commodity Exchange closed 0.2 percent higher.  

  Palm, soy and crude oil prices at 1017 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      AUG2    3007   -18.00    3005    3033     608
  MY PALM OIL      SEP2    3025   -15.00    3025    3053    3799
  MY PALM OIL      OCT2    3042    -3.00    3034    3065   15569
  CHINA PALM OLEIN JAN3    8082   +32.00    8034    8130  306522
  CHINA SOYOIL     JAN3    9826   +18.00    9792    9908  613448
  CBOT SOY OIL     DEC2   55.41    +0.20   54.98   55.51    8483
  NYMEX CRUDE      AUG2   91.48    -1.18   91.42   92.30    1862

  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=3.155 Malaysian ringgit