* Heavy rains seen next week in Johor, Pahang states-weather office * USDA report to give cues on U.S. soy stocks * Dec 1-10 palm oil exports from Malaysia seen down 5.5 pct from month ago-trade (Updates prices) By Niluksi Koswanage KUALA LUMPUR, Dec 9 (Reuters) - Palm oil futures slipped on Friday as the European Union summit failed to build on moves for fiscal union to salvage the euro, potentially putting the brakes on global economic growth and commodity demand. A deepening split in the bloc emerged on Friday with majority of EU leaders agreeing to enforce stricter budget rules for the single currency region while Britain rejected the proposed amendments after failing to secure its concessions. Palm oil along with other financial markets could fall further next week as the EU split deepens worries that policy makers will be unable to insulate the world from the two year euro zone debt crisis. Palm oil futures still notched its first weekly gain in three weeks over concerns of heavy rains curbing output and eating into stocks. "Sentiment has been taken over by the euro zone gloom," said a dealer with a foreign commodities brokerage in Kuala Lumpur. "The supply and demand picture will be important for next week. It appears that export demand will be lower but the heavy rains could limit supply. Some choppy trading is expected," he added. Benchmark February palm oil futures on the Bursa Malaysia Derivatives Exchange settled down 0.2 percent to 3,084 ringgit ($980) per tonne. Overall traded volumes stood at 14,037 lots of 25 tonnes each, much lower than the usual 25,000 lots as investors were unwilling to commit funds or take positions for now. The Malaysian weather office stuck to its earlier warning that a two-day moderately heavy rain spell starting from Monday in the key oil palm growing states of Johor and Pahang could cause floods in low-lying areas. Both states account for 30-40 percent of national output. Excessive rains, however, can affect oil yield quality and force palm oil firms to sell the edible oil at a discount. So far, however, planters have not reported major logistical disruptions. "I think the markets have priced in lower production for now," said another trader in Kuala Lumpur. "What they need to know about is exports and my guess is exports could come down because palm oil's discount to soyoil has narrowed," he added referring to spread that has dropped to below $45 a tonne currently from over $190 in October. Cargo surveyor Intertek Testing Services will issue Dec. 1-10 Malaysian palm oil exports on Saturday. The market is expecting exports to fall 5.5 percent to around 442,000 tonnes from Nov. 1-10. Brent crude oil fell below $108 on Friday, limiting the appeal for vegetable oil's use in competing biofuel. U.S. soyoil for January delivery barely moved in Asian trade on expectations the USDA later on Friday will raise its soy stocks forecast. China's most active May 2012 soybean oil contract <0#DBY:> edged up 0.1 percent. Palm, soy and crude oil prices at 1036 GMT Contract Month Last Change Low High Volume MY PALM OIL DEC1 3050 -10.00 3050 3065 119 MY PALM OIL JAN2 3083 +0.00 3065 3091 958 MY PALM OIL FEB2 3084 -5.00 3063 3097 7959 CHINA PALM OLEIN MAY2 7968 +6.00 7930 8010 89622 CHINA SOYOIL MAY2 8782 +12.00 8748 8816 152186 CBOT SOY OIL JAN2 50.25 -0.21 50.12 50.49 5809 NYMEX CRUDE JAN2 98.28 -0.06 97.55 98.58 18911 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

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