VEGOILS-Palm reverses early gains to record biggest monthly drop since March

* Prices near 3-month low, down 2.7 pct this week

* July exports down as expected, but daily average still high

By Fergus Jensen

JAKARTA, July 31 (Reuters) - Malaysian palm oil futures edged down on

Friday, reversing early gains to record their biggest monthly drop since March,

but losses were limited by a weaker ringgit and data showing Malaysian exports

fell less than expected this month.

By Friday's close, the benchmark palm oil contract for October was

down 0.19 percent at 2,118 ringgit ($554.02) a tonne on the Bursa Malaysia

Derivatives Exchange. On Thursday, the contract hit its lowest level since April

30, at 2,099 ringgit.

Palm prices are down around 2.7 percent this week and have slipped 4.9

percent in July, their biggest monthly decline since March when they fell more

than 6 percent.

On Friday, traded volume stood at 34,052 lots of 25 tonnes each, below the

roughly 35,000 lots usually traded daily.

"There's a lot of uncertainty," said a trader with a foreign commodities

brokerage in Kuala Lumpur. "Supply and demand factors are slightly bearish but

the ringgit today weakened (and) that is friendly."

The ringgit stayed near a 17-year trough with bond prices lower as

growing political fallout linked to Prime Minister Najib Razak and the

debt-ridden state fund 1MDB hurt sentiment. Benchmark palm is priced in the

Malaysian currency, and a weaker ringgit offers some support.

Exports of Malaysian palm oil products in July fell 6.4 percent from June to

1.54 million tonnes, cargo surveyor Intertek Testing Services (ITS) said on

Friday.

"Most people expected it to be down around 8 percent," the trader said.

On an annual basis, shipments were up 14 percent and the daily average in

July was also relatively high.

According to data released later on Friday by cargo surveyor Societe

Generale de Surveillance (SGS), however, exports of Malaysian palm oil products

for July fell 9.2 percent to 1.54 million tonnes.

Palm oil may break a resistance at 2,124 ringgit per tonne and rise towards

the next resistance at 2,141 ringgit, according to Wang Tao, a Reuters market

analyst for commodities technicals.

Indonesia's crude palm oil (CPO) output likely rose for a fourth month in

June to hit its highest level since at least August on supplies from new

plantations, while exports continued their rally given strong festival demand, a

Reuters survey showed.

Indonesia's export tax for crude palm oil in August will be zero percent,

unchanged from July, Nurlaila Nur Muhammad, director of agriculture and forestry

product exports at Indonesia's trade ministry said on Friday.

In other vegetable oils, the U.S. August soyoil contract fell 0.3

percent during afternoon Asian trade, while the most active soybean oil contract

on the Dalian Commodity Exchange lost 0.22 percent.

Crude oil prices fell on Friday as concern over global oversupply

intensified after the head of oil producers' cartel OPEC indicated there would

be no cuts in production.

Palm, soy and crude oil prices at 1035 GMT

Contract Month Last Change Low High Volume

MY PALM OIL AUG5 2120 -4.00 2110 2125 24

MY PALM OIL SEP5 2119 -7.00 2116 2132 5046

MY PALM OIL OCT5 2118 -4.00 2114 2131 17250

CHINA PALM OLEIN JAN6 4752 -4.00 4742 4798 515086

CHINA SOYOIL JAN6 5484 -12.00 5476 5542 412152

CBOT SOY OIL DEC5 30.61 -1.70 30.60 30.76 3041

INDIA PALM OIL JUL5 417.60 -1.70 417.60 419.20 543

INDIA SOYOIL AUG5 578.30 +2.50 574.70 578.80 46145

NYMEX CRUDE SEP5 47.58 -0.94 47.35 48.57 31128

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 = 3.8230 ringgit)

(Editing by Subhranshu Sahu and Pravin Char)