* Weather fears lift palm oil after midday break
* Weather office upgrades flood warning for Sarawak
* Palm seen to drop to 3,139 ringgit -technicals
(Updates throughout)
By Chew Yee Kiat
SINGAPORE, Jan 6 (Reuters) - Malaysian crude palm oil
futures gained on Friday as prospects of erratic weather hurting
production overshadowed renewed worries about the euro zone debt
crisis.
The focus is on dry weather in South America hurting soy
yields and prospects of heavy Southeast Asian rains disrupting
palm oil production, which is pushing palm oil prices up.
"We are lacking a new catalyst. The traders will most
probably just play within the range while keeping an eye on the
CBOT," said a dealer with a foreign commodities brokerage in
Kuala Lumpur.
Benchmark March palm oil futures on the Bursa
Malaysia Derivatives Exchange rose 0.7 percent to close at 3,211
ringgit ($1,000) per tonne. The tropical oil ended the first
week of the new year 1.1 percent higher.
Traded volumes on Friday stood at 18,702 lots of 25 tonnes,
compared to the usual 25,000 lots.
According to technical charts, the price target for palm oil
remains at 3,139 ringgit per tonne, Reuters market analyst Wang
Tao said.
On the weather front, the Malaysian Meteorological
Department upgraded its heavy rain warning from yellow stage to
a more severe orange stage for parts of Sarawak, a key producing
state that accounts for almost 15 percent of national palm oil
output.
The weather office kept its heavy rain advisory at yellow
stage for Pahang, Johor and Sabah, the other major oil palm
producing states in No.2 producer Malaysia.
While floods have been reported in some plantations in
Sarawak, there has not been any serious disruption in production
due to the floods, said a trader in Kuala Lumpur.
Palm oil production in Malaysia is in the seasonally low
yield phase and industry players see December's production level
falling by 8 percent compared to a month ago.
A Reuters poll of seven plantation firms showed a steeper
13.9 percent decline in Malaysia's December output. Stocks for
the month may fall to a five-month low of 1.95 million tonnes,
according to the poll.
The Malaysian Palm Oil Board will release official data for
stocks, production and exports on Jan. 10.
Oil climbed above $113 a barrel on Friday as concern over
any possible supply disruption due to mounting tensions between
Iran and the West countered worries about Europe's economy and
rising U.S. stockpiles.
Weaker global economic sentiment on the back of the euro
zone debt crisis also weighed on other vegetable oil markets.
U.S. soyoil for January delivery slipped while the most
active September 2012 soyoil contract on China's Dalian
commodity exchange lost 0.4 percent.
Palm, soy and crude oil prices at 1002 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN2 3200 +0.00 3185 3205 57
MY PALM OIL FEB2 3216 +16.00 3185 3218 998
MY PALM OIL MAR2 3211 +21.00 3176 3215 10897
CHINA PALM OLEIN MAY2 8076 -22.00 8010 8088 23944
CHINA SOYOIL SEP2 9080 -32.00 9008 9082 220654
CBOT SOY OIL MAR2 52.46 +0.40 52.02 52.59 4682
NYMEX CRUDE FEB2 102.19 +0.38 101.30 102.50 15279
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
