11/01/2012 (Reuters) - Malaysian crude palm oil futures were unchanged on Tuesday as concerns that erratic weather in South America and Southeast Asia could hurt oilseed production offset uncertainty over the euro zone debt crisis.

Prospects of hot and dry weather in Argentina lowering soy yields and wet weather in Malaysia disrupting palm oil production helped lift palm oil futures. 

But gains were erased by fears that the euro zone debt crisis could spill over into other markets.  

"The market is very quiet, it's locked in a tight range. It has been tracking external markets like CBOT and Dalian," said a trader with a foreign commodities brokerage in Kuala Lumpur. 

"It will be trading in the 3,200-3,250 ringgit range unless there is any new fundamental factor," the trader added.

Benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange closed unchanged at 3,215 ringgit ($1,000) per tonne.

Traded volumes stood at 18,847 lots of 25 tonnes each, compared to the usual 25,000 lots. 

Palm oil is neutral in a range of 3,176-3,244 ringgit per tonne, with a higher chance to eventually drop below 3,176 ringgit according to technical charts, said Reuters market analyst Wang Tao.

Industry regulator Malaysian Palm Oil Board said Malaysia's December palm oil stocks fell 1.5 percent from a month ago, better than expectations of a 5.7 percent decline in a Reuters survey. Stock levels stayed above 2 million tonnes,

Wet weather in No.2 palm oil producer Malaysia has been a constant worry for traders as floods may disrupt production and add pressure to tightening stocks.

The Malaysian Meteorological Department issued heavy rain warnings for Sarawak, a key producing state that accounts for almost 15 percent of national palm oil output.

The market is also keeping an eye on export trends for signs of slowing demand for the tropical oil. Malaysian palm oil exports in Jan. 1-10 fell 16 percent compared to a month ago, according to cargo surveyor Intertek Testing Services, in line with industry's expectations.

Another cargo surveyor Societe Generale de Surveillance reported a steeper 19 percent decline for the same period.

In other oil markets, Brent crude edged up above $113 on Tuesday, spurred by tensions over Iran's nuclear programme and unrest in Nigeria, but persistent worries about the strength of Europe's economies capped gains.

U.S. soyoil for March delivery rose 0.3 percent, extending from an earlier weather-driven rally. The most active September 2012 soyoil contract on China's Dalia commodity exchange also jumped 0.6 percent.

The U.S. Department of Agriculture will issue January world crop reports on Thursday which traders expect to show downgrades of South American crop forecasts.

"Dalian is tracking CBOT yesterday, which rose quite a bit on Argentine dry weather," said Zhang Ru Ming, research manage with Liangyun Futures in Dalian.

"We will be looking at the USDA reports on Thursday but they will not move the market too much as it has already priced in expectations on the reports," he added. 

Palm, soy and crude oil prices at 1003 GMT
                                                                    
  Contract                        Month    Last   Change     Low    High  Volume
  MY PALM OIL              JAN2    3220   +10.00    3210    3230      14
  MY PALM OIL              FEB2    3219    -1.00    3219    3245    1701
  MY PALM OIL              MAR2    3215    +0.00    3208    3240    9916
  CHINA PALM OLEIN SEP2    8162   +34.00    8162    8220   82518
  CHINA SOYOIL          SEP2    9106   +58.00    9100    9154  228784
  CBOT SOY OIL          MAR2   52.49    +0.16   52.10   52.52    7023
  NYMEX CRUDE         FEB2  102.71    +1.40  101.30  102.87   19252
                                                                    
  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 = 3.1535 ringgit)