VEGOILS-Palm gains on improved demand outlook; Greece concerns remain

* Palm oil rises to 2,268 ringgit per tonne

* Overnight USDA report bolsters palm oil

* Greece uncertainty limits gains

(Updates throughout, adds closing prices)

By Michael Taylor

JAKARTA, July 1 (Reuters) - Malaysian palm oil finished in positive

territory on Wednesday, tracking other vegetable oils higher after a bullish

overnight U.S. agriculture department report but with traders remaining cautious

after Greece's debt default.

The September palm oil contract on the Bursa Malaysia Derivatives

exchange extended earlier gains to close 1.8 percent higher at 2,268 ringgit

($606) a tonne after trading in a range of 2,234-2,268 ringgit.

Palm prices are 0.4 percent lower for the week and trading near one-month

lows.

"The market is very positive because the USDA report is very positive for

the grains complex," said a palm trader with a foreign commodities brokerage in

Malaysia. "There is (still) a lot of uncertainty ... so we are back to talking

about competitive oils."

U.S. soybeans and corn stocks ballooned from a year ago but still missed

market forecasts as strong demand ate into supplies, the U.S. Department of

Agriculture said on Tuesday.

Both corn and soybean futures surged after the report was

released, rallying to their highest since mid-January.

Total traded volume for palm was 36,858 lots of 25 tonnes each, compared

with the usual 35,000 lots.

In other vegetable oils, the U.S. July soyoil contract fell 0.5

percent, while the most active January soybean oil contract on the

Dalian Commodity Exchange added 2.2 percent.

On overall sentiment, European shares and peripheral euro zone bonds rose

and the euro held its own as some investors kept faith with expectations that

Greece will find a way to stay inside the currency zone despite defaulting on an

IMF loan.

Chinese shares looked like they had recovered from another erratic start

before a late plunge left them down 5 percent -- their fourth fall in the past

five sessions.

"It's a sideways market," a second Malaysia-based palm trader said. "The

market is up on the strong close on the CBOT."

Signals are mixed and will become clear when palm oil gets out of a neutral

range of 2,216-2,293 ringgit per tonne, Reuters market analyst Wang Tao said.

Palm, soy and crude oil prices at 1024 GMT

Contract Month Last Change Low High Volume

MY PALM OIL JUL5 0 +0.00 0 2227 0

MY PALM OIL AUG5 2265 +37.00 2234 2266 3172

MY PALM OIL SEP5 2268 +39.00 2234 2268 19719

CHINA PALM OLEIN JAN6 5134 +102.00 4996 5204 736912

CHINA SOYOIL JAN6 5862 +128.00 5700 5924 625622

CBOT SOY OIL DEC5 33.89 +0.60 33.81 34.14 8355

INDIA PALM OIL JUL5 448.40 +0.60 446.20 449.00 769

INDIA SOYOIL AUG5 588.70 +0.55 586.00 590.50 37350

NYMEX CRUDE AUG5 58.73 -0.74 58.27 58.98 28865

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

India soy oil in Indian rupee per 10 kg

Crude in U.S. dollars per barrel

($1 = 3.7440 ringgit)

($1 = 6.2008 Chinese yuan renminbi)

($1 = 63.5800 Indian rupees)

(Editing by David Goodman)