05/03/2013 (Reuters) - Malaysian palm oil futures edged down in thin volume on Tuesday after gains in the previous session lifted prices from near two-month lows, with traders focusing on a key industry conference to determine strategies.

The benchmark May contract on the Bursa Malaysia Derivatives Exchange fell 0.6 percent to 2,399 ringgit ($772) per tonne by the day's close. Prices traded in a tight range of 2,389 to 2,428 ringgit.

Total traded volume was thin, at 19,877 lots of 25 tonnes each, below the usual 25,000 lots.

A technical bounce on Monday had helped prices snap eight straight sessions of declines and move higher from levels last seen in mid-January.

"There was an attempt to push the market higher yesterday and some anticipation about a follow through in buying, but nothing materialized," said a trader with a local commodities brokerage in Malaysia.

"Traders are mostly waiting on the analysts and speakers for more clues. There will probably be slow trading until tomorrow," he added. The palm oil conference being held in the Malaysian capital runs March 4-6.

Technicals showed Malaysian palm oil is expected to either hover around a resistance level of 2,418 ringgit per tonne or rebound to 2,450 ringgit, said Reuters market analyst Wang Tao.

Several palm oil refineries have slowed operations and some plan to halt output if a Malaysian military attack on an armed Filipino group on Borneo island drags on, potentially disrupting supply of the tropical oil to China, refinery officials told Reuters on Tuesday.

Sabah, part of Borneo island, is Malaysia's top oil palm growing region, accounting for a quarter of national production.

Much of the palm oil from Sabah is shipped to China -- the world's second-largest consumer of edible oils.

The development was not impacting prices significantly so far, traders, analysts and government officials said. But prolonged supply disruptions could buoy prices, although climbs would probably be limited as high stock levels in the country continue to weigh.

"If the turmoil drags on for weeks and months, it could have a more severe impact on production," CIMB Investment Bank said in a note. "The security fears may also affect the operations of ports located near where the clashes are taking place."

In other markets, Brent crude futures rose towards $111 per barrel on Tuesday, bucking a five-day losing streak on bargain buying after China pledged to keep its economy growing at 7.5 percent.

In competing vegetable oil markets, U.S. soyoil for May delivery edged down 0.1 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodity Exchange inched up 0.1 percent.

  Palm, soy and crude oil prices at 1018 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAR3    2390   -10.00    2390    2399      64
  MY PALM OIL      APR3    2389   -16.00    2386    2408     956
  MY PALM OIL      MAY3    2399   -14.00    2389    2428   12118
  CHINA PALM OLEIN SEP3    6602   -36.00    6572    6696  689472
  CHINA SOYOIL     SEP3    8322    +6.00    8304    8390  536938
  CBOT SOY OIL     MAY3   50.19    -0.07   50.04   50.51    5841
  NYMEX CRUDE      APR3   90.47    +0.35   90.12   90.70   12419

  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=3.104 ringgit)