09/11/2011 (Reuters) - Malaysian palm oil futures rose to a seven-week high on Tuesday ahead of a slew of industry data this week and as concerns of bad weather hitting output of the tropical oil spurred some investors to stock up.

But gains were limited by fears the euro zone financial turmoil was deepening with surging bond yields possibly damaging Italy's fund raising plans and Greece struggling to pick a new leader.

The La Nina weather pattern is set to bring more rains during the year-end monsoon, supporting prices that have fallen by almost a fifth in 2011 at a time when investors continue to focus on the euro zone debt crisis that may stall global economic growth.

"There is caution but investors do not want to let go of the fact that weather and production problems could push up the market later on," said a trader with a foreign commodities brokerage.

The benchmark January palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange settled up 1.1 percent to 3,045 ringgit ($978) after rising as high as 3,048 ringgit -- a level unseen since Sept. 21.

Traded volumes stood at 25,610 lots of 25 tonnes each, compared to the usual 25,000 lots on investor caution over the euro zone debt jitters.

Technicals appeared supportive, with Reuters analyst Wang Tao keeping a bullish target of 3,060 ringgit as a rebound from the Oct. 6 low of 2,754 ringgit not been completed.

Some players were shortcovering ahead of industry data, which includes Malaysia reporting on October palm oil stocks, production and export data on Thursday. The U.S Department will issue global supply and demand estimates for grains and oilseeds, including soybeans, a day earlier. 

Both Malaysian palm oil and U.S. soybean data could point to higher closing stocks -- a factor that has been largely priced in.

A disappointing soy harvest in the MidWest and a seasonally lower palm output in the last quarter may give some support although both vegetable oil and grains traders say export demand will slow a little, offsetting any gains.

Oil prices rose over $115 on Tuesday on the back of strong seasonal fundamentals, as investors weighed the prospect of supply disruption from Iran against concerns over Italy's sovereign debt risk.

Other related markets were mixed. U.S. soyoil for December delivery inched up ahead of the U.S. agriculture data report on Wednesday. China's most active May 2012 soybean oil contract dipped.

"From a macro perspective, the situation in Europe is less encouraging now with Italy in the spotlight," said Huang Zhi Qiang, an analyst with Guotai & Junan.

"With the exception of precious metal, most commodities (including soyoil) will weaken as investors remain cautious," the analyst said. 

Palm, soy and crude oil prices at 1015 GMT
                                                                       
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      NOV1    3050   +27.00    3010    3050      21
  MY PALM OIL      DEC1    3050   +29.00    2995    3052    1978
  MY PALM OIL      JAN2    3045   +32.00    2984    3048   13332
  CHINA PALM OLEIN MAY2    7974   -32.00    7896    8006  120404
  CHINA SOYOIL     MAY2    9156   -38.00    9110    9198  323556
  CBOT SOY OIL     DEC1   51.40    +0.20   51.01   51.46    4340
  NYMEX CRUDE      DEC1   96.17    +0.65   95.23   96.60   16757
                                                                       
  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 = 3.114 Ringgit)