* Palm oil prices post biggest fall since Nov. 12 * Investors use high stocks to book profits -trader * Global commodity markets rise on stronger China factory data * Palm oil to end rebound around 2,422 ringgit -technicals (Updates prices, adds detail) By Anuradha Raghu KUALA LUMPUR, Dec 3 (Reuters) - Malaysian palm oil futures tumbled to a three-week low on Monday as investors booked profits on expectations of record stocks last month and after strong Chinese economic data lifted markets. Palm oil prices initially inched higher in early trading hours buoyed by signs of China's economic revival which fuelled hopes of stronger commodity demand. Later on in the day, the market posted its biggest fall since Nov. 12 as traders unwound positions. "This is a headache, the market is dropping quite a bit. Investors are using the high stocks level to book profits," said a trader with a foreign brokerage, estimating stocks could go beyond the record 2.5 million tonnes notched in October. "In reality, palm oil is at a $350 per tonne discount to soyoil and that should kick in some demand (and lift the markets)," he added. Palm oil futures are set to post their worst annual performance this year since the financial crisis struck in 2008 as high stocks, flagging demand and deepening euro zone debt crisis curbed risk taking. The benchmark February contract on the Bursa Malaysia Derivatives Exchange fell as much as 2.4 percent to 2,313 ringgit ($760) per tonne before settling at 2,317 ringgit. Total traded volumes stood at 30,926 lots of 25 tonnes each, higher than the usual 25,000 lots as investors actively booked profits. Palm oil is expected to end its current rebound, based on a presumption that the fall from the Nov. 20 high of 2,485 ringgit has not been completed, said Reuters market analyst Wang Tao. Traders said investors were trying to bring the market down to 2,300 ringgit, after which there was likely to be rebound. Other global financial markets were still up on a clutch of factory surveys on China showing evidence of an economic revival after seven quarters of slowing growth that signals stronger commodity demand from the world's second largest economy. China's encouraging revival supported Brent crude, which held around $111 per barrel on Monday, although gains were limited by concern about the economic welfare of the United States, the world's top oil consumer. Stronger buying from Europe and India lifted Malaysian palm oil exports in November compared to a month ago, according to data from cargo surveyors. Based on this, some traders are holding out for signs of higher demand, coupled with seasonally weaker palm oil output in Malaysia that could limit the growth of this Southeast Asian country's stocks. Production tends to slow down in the year-end as heavy rains can trigger floods that disrupt harvesting and complicate logistics. "Previously we were talking about Dec-Jan stocks hitting 3 million tonnes, but I don't think that will materialize," said another trader. "Instead of going up, stocks could drop down by at least 50,000 tonnes because of demand from Europe and China". In palm oil's competing markets, U.S. soyoil for December delivery rose 0.8 percent. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange climbed 1.4 percent in late Asian trade. In a sign of festival demand, Chinese soy buyers have stepped up orders from the United States in recent days, keen to purchase cargoes for delivery in the first quarter of next year, traders said last week. China celebrates a one-week Lunar New Year holiday in February. Palm, soy and crude oil prices at 1020 GMT Contract Month Last Change Low High Volume MY PALM OIL DEC2 2101 -44.00 2100 2139 235 MY PALM OIL JAN3 2240 -62.00 2236 2338 3605 MY PALM OIL FEB3 2317 -53.00 2314 2405 17627 CHINA PALM OLEIN MAY3 6840 +132.00 6746 6880 528054 CHINA SOYOIL MAY3 8684 +118.00 8600 8700 548740 CBOT SOY OIL JAN3 50.15 +0.41 49.73 50.55 10626 NYMEX CRUDE JAN3 88.85 -0.06 88.66 89.30 17032 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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