21/12/2011 (Reuters) - Malaysian crude palm oil futures ended flat on Tuesday as traders were divided between lower export demand and expectations of heavy rains disrupting output in southeast Asia.

Palm oil is however set to see a 21 percent decline in 2011, weighed down by a debt crisis in Europe where policymakers failed to boost resources at the International Monetary Fund by a targeted 200 billion euros, stirring fears the funds will not be enough to contain the crisis.

Sentiment in Asian financial markets was quite fragile following the death of North Korea leader Kim Jong-il that raised concerns of regional instability.

Palm oil traders also kept an eye outfor hot weather in South America curbing the soy crop that is crushed into competing soyoil.

"External factors are in play. It is still a range play for palm oil at 3,005 ringgit to 3,020 ringgit with no direction," said a trader with a local commodities brokerage. 

"There is still a conflict of uncertainty over demand versus heavy rain hitting palm oil output."

Benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange ended unchanged at 3,020 ringgit ($950) per tonne after going as low as 2,997 ringgit.

Traded volumes stood at 17,272 lots of 25 tonnes each, compared with the usual 25,000 lots as some investors were closing out positions ahead of the year-end. 

Malaysia's weather office has warned of heavy rains in key oil palm growing state of Johor that accounts for a fifth of national output.  

Production is already coming down partly due to seasonally weaker yields and the market expects output to fall more than 18 percent this month. 

But exports from Malaysia are also falling as top buyers slow orders before the year end, giving some breathing space to palm oil stocks that have started to tighten a little.

Cargo surveyor Intertek Testing Services reported a 10.1 percent drop in exports to 933,553 tonnes in Dec. 1-20 compared to the same period a month ago due to a decline in orders from mainly India.  

Another cargo surveyor, Societe Generale de Surveillance reported a 10.5 percent decline.  

Oil prices rose more than $1 on Tuesday as supply worries outweighed rumbling concerns on the euro zone.  

U.S. soyoil for January delivery climbed 0.8 percent in Asian trade despite scattered showers in Brazil and Argentina that will do little to break the dry spell affecting soy crops. 

The most active Sept 2012 soyoil contract on China's Dalian commodity exchange slipped in the wake of palm oil's earlier fall in the session. 

"The CBOT, Dalian soybean markets are picking up due to the weather conditions in south America and southeast Asia," said Huang Zhi Qiang, an analyst with Shanghai-based Guotai Junan Futures. 

"The (prospects of a) rebound is, however, limited as the global economic climate is still gloomy on the back of slowing growth in Europe and the US," the analyst added.   

  Palm, soy and crude oil prices at 1013 GMT
                                                                     
  Contract                  Month       Last    Change    Low    High    Volume
  MY PALM OIL            JAN2      3020    -1.00      3002    3020     414
  MY PALM OIL           FEB2       3021    +1.00     3000    3022    3334
  MY PALM OIL          MAR2       3020    +0.00     2997    3020    9098
  CHINA PALM OLEIN MAY2      7790   -36.00    7766    7826    105934
  CHINA SOYOIL         SEP2      8812   -26.00    8802    8852    258142
  CBOT SOY OIL         JAN2      49.53    +0.48    49.10   49.54     4727
  NYMEX CRUDE        JAN2       95.30    +1.42    94.14   95.30     2630
                                                                   
  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 = 3.1825 Malaysian ringgit)