* European debt issues linger
* Wet weather the only positive fundamental -traders
* MPOB data eyed on Tuesday after USDA numbers weigh on sentiment
By Michael Taylor
(Reuters) - Palm futures fell to their lowest level in more than a month on Monday, tracking comparative oils lower as investors continued to fret about European debt, but expectations of a heavy rainy season helped cap losses.
Financial markets gave the thumbs down on Monday to a landmark EU deal to deepen economic integration, pushing
European stocks and the euro lower as investors judged its debt crisis would continue to deepen.
Benchmark February palm oil futures on the Bursa
Malaysia Derivatives Exchange closed 2.8 percent lower at 2,998 ringgit ($950) per tonne. Prices earlier fell to 2,994 ringgit, the lowest since Nov. 8.
Traded volumes for the February palm contract were at 10,079 lots of 25 tonnes each, compared with 3,084 lots on Friday.
"On Friday soybean oil dropped quite heavily and today the
Dalian dropped also, so the market is taking there cue," said a Kuala Lumpur-based palm trader. "It is because of what happened in Europe."
He said books would likely start to be squared as the year-end neared.
U.S. soy bounced from a 14-month low on Monday, while wheat ticked up from its lowest in more than five months as agricultural markets took a breather following Europe's steps
to resolve its debt crisis.
China's most active May 2012 soybean oil contract <0#DBY:> eased to a near two-week low.
Wheat, corn and soybean markets are likely to remain under pressure from record-large crops around the world forecast on Friday by the U.S. Department of Agriculture.
"Prices are lower today in unison with CBOT and the bearish USDA data," said a second Kuala Lumpur-based palm trader. "There is liquidation from some funds.
"Supplies look adequate for worldwide grains," he added. "We are not expecting a bullish report from MPOB tomorrow, more downside in the making with anemic demand."
The Malaysian Palm Oil Board (MPOB) is due to release palm oil stocks, production, and exports data for November on Tuesday.
Despite the bearish outlook, the monsoon season is helping to support prices. Earlier on Monday, the state weather agency of top palm producer Indonesia warned of floods in top producing regions Kalimantan and Sumatra.
Excessive rains can affect oil yield quality and force palm oil firms to sell the edible oil at a discount. So far, however, planters have not reported major logistical disruptions.
On the data front, cargo surveyor Intertek Testing Services said on Saturday that palm oil exports of Malaysian palm oil products for Dec 1-10 fell 5.1 percent.
"The market was trying to hold on this morning ... it was under selling pressure all the way," a trader said.
In related markets, Brent crude slipped below $108 per barrel as investors worried that a European pact on closer fiscal union might not be enough to contain the region's debt crisis or support growth.
(Additional reporting by Yayat Supriatna; Editing by Miral Fahmy)
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