* Palm oil to slip to 3,139 ringgit - technicals * Heavy rains may last till weekend in key M'sian oil palm states (Updates prices) By Chew Yee Kiat SINGAPORE, Jan 5 (Reuters) - Malaysian crude palm oil futures slipped on Thursday on rekindled investor caution over the euro zone debt crisis, although weather concerns in oilseed growing regions limited losses. A French bond auction due later in the day renewed jitters about the ability of euro zone countries to refinance their debt, a concern that drove palm oil prices down last year for their first annual loss since 2008. Traders are also eyeing prospects of dry weather in South America lowering soy yields and heavy rains in Southeast Asia disrupting palm oil production and boosting prices. "There is not much activity, probably because it's the beginning of the year. The weather is definitely a concern here," said a trader with a foreign commodities brokerage in Malaysia. Benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange closed 1.1 percent lower to 3,190 ringgit ($1,000) per tonne. Traded volumes for palm oil futures on Thursday stood at 16,400 lots of 25 tonnes, thinner than the usual 25,000 lots. "Traders are still cautious and it is still early to judge the severity of drought in South America," said another dealer with a foreign commodities brokerage in Malaysia. Palm oil futures will fall to 3,139 ringgit per tonne, according to a wave analysis and Fibonacci retracement, said Reuters analyst Wang Tao. The Malaysian Meteorological Department issued a warning that heavy rains may last till the weekend in the key oil palm growing states of Johor, Pahang, Sabah and Sarawak, which account for almost three quarters of national palm oil output. While there have not been any reports on serious disruption due to floods, investors are watching the weather development closely as stocks in No.2 producer Malaysia are likely to fall to a five-month low in December. Brent crude rose toward $114 a barrel on Thursday as fears of an Iranian supply disruption mounted after the European Union agreed to cut off oil imports from the No. 2 OPEC producer, offsetting jitters over the euro zone crisis. In other vegetable oil markets, weather worries in Argentina continued to be a bullish factor. U.S. soyoil for January delivery gained 0.1 percent in Asian trade while the most active Sept 2012 soyoil contract on China's Dalian commodity exchange rose 0.13 percent. "We are still watching closely the South American weather development, and maybe the Iranian situation with crude oil right now," said Zhang Ru Ming, research manager with Liangyun Futures in Dalian. Palm, soy and crude oil prices at 1001 GMT Contract Month Last Change Low High Volume MY PALM OIL JAN2 3205 -18.00 3200 3225 197 MY PALM OIL FEB2 3200 -23.00 3196 3234 1079 MY PALM OIL MAR2 3190 -35.00 3190 3232 11731 CHINA PALM OLEIN MAY2 8096 -12.00 8056 8148 46408 CHINA SOYOIL SEP2 9108 +12.00 9052 9174 292632 CBOT SOY OIL MAR2 52.53 -0.50 52.52 53.13 5576 NYMEX CRUDE FEB2 102.58 -0.64 102.38 103.73 16192 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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