* Investors square positions ahead of USDA report -trader * Market in "consolidation mood", trend still positive -trader * Palm oil to drop to 2,430 ringgit -technicals (Updates prices, adds details) By Anuradha Raghu KUALA LUMPUR, June 12 (Reuters) - Malaysian palm oil futures edged down on Wednesday, as traders eyed a U.S. agriculture report expected to show rising global supplies of grain, but prices were supported around two-month highs by a demand uptick and smaller stockpiles. The U.S. Department of Agriculture (USDA) supply and demand report, set for release late on Wednesday is expected to reveal bumper crops which may crimp markets tracked by palm. Palm oil stocks in Malaysia, the world's second-largest producer of the edible oil, fell to their lowest in nearly a year, at 1.82 million tonnes at the end of May, as exports outstripped near-stagnant production. "The market is consolidating and there is position-squaring ahead of the USDA report today, which might set the direction for the rest of the week," said a trader with a foreign commodities brokerage in Malaysia. The benchmark August contract on the Bursa Malaysia Derivatives Exchange had lost 0.2 percent to 2,451 ($782) ringgit per tonne by Wednesday's close. Prices traded in a tight range between 2,445 and 2,465 ringgit. Total traded volumes stood at 17,932 lots of 25 tonnes each, well below the usual 35,000 lots as traders waited for the USDA report. Trade on China's Dalian Commodities Exchange, which has been closed for a three-day holiday, resumes on Thursday. Technicals showed that a bearish target of 2,430 ringgit per tonne remained unchanged for palm oil as a top had formed around a resistance at 2,473 ringgit, said Reuters market analyst Wang Tao. Despite slightly softer prices, palm oil's uptrend may still be intact, the Kuala Lumpur-based trader said, supported by solid domestic and foreign fundamentals. "The 2,450-ringgit level has been the top of the trading band for a lot of people these past two months. The market agrees there's still some room to go up, looking at the strong fundamentals coming out of Malaysia and Indonesia," he said. Analysts also said a weaker ringgit could lead to stronger export demand in June as it makes Malaysian crude palm oil cheaper than other edible oils. Exports of palm rose 6 to 10 percent in the first ten days of June. "The Malaysian ringgit is one of the Asian currencies that have led declines against the U.S. dollar," Phillip Futures analyst Sim Han Qiang said in a note on Wednesday. In other markets, Brent crude oil steadied around $103, buoyed by a rally in global stock markets despite an unexpected jump in oil inventories in the United States and a cut in estimates for oil demand growth by the world's big oil market forecasters. In vegetable oil markets, U.S. soyoil for July inched up 0.3 percent in late Asian trade. Palm, soy and crude oil prices at 1004 GMT Contract Month Last Change Low High Volume MY PALM OIL JUN3 0 +0.00 0 0 0 MY PALM OIL JUL3 2451 +1.00 2444 2460 850 MY PALM OIL AUG3 2451 -5.00 2445 2465 9555 CHINA PALM OLEIN SEP3 6358 +214.00 6152 6382 1177478 CHINA SOYOIL SEP3 7496 +94.00 7356 7508 788414 CBOT SOY OIL JUL3 48.20 +0.16 48.03 48.22 3538 NYMEX CRUDE JUL3 95.35 -0.03 94.46 95.66 17613 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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