* Palm recovers on bargain hunting from 5-wk low
* Malaysian palm exports for July 1-25 down 14 pct -ITS
* Palm oil to end rebound below 2,970 ringgit -technicals (Updates prices, adds SGS export data)
By Chew Yee Kiat
SINGAPORE, July 25 (Reuters) - Malaysian crude palm oil rebounded on Wednesday on bargain hunting after prices hit a five-week low earlier in the session, although gains were modest as investors remained worried that the euro zone debt crisis could hurt demand.
The euro zone's private sector shrank for a sixth month in July as manufacturing output nosedived, notably in Germany and France, adding to the likelihood that the bloc will slump back into recession, business surveys showed on Tuesday.
Market players also priced in weaker Malaysian exports for the July 1-25 period after cargo surveyor Intertek Testing Services reported a 14 percent monthly drop.
"The market recovered today as it was a little bit oversold. Exports were down 14 percent but that has already been factored in considering the market dropped close to 200 ringgit in the last few days," said a trader with a foreign commodities brokerage in Malaysia.
The benchmark October palm oil futures on the Bursa Malaysia Derivatives Exchange edged up 0.9 percent to close at 2,951 ringgit ($930) per tonne. Prices earlier dropped to 2,898 ringgit, the lowest since June 18.
Traded volume stood at 45,813 lots of 25 tonnes each, higher than the usual 25,000 lots.
On the technicals front, palm oil is expected to end its current rebound below a resistance at 2,970 ringgit, said Reuters market analyst Wang Tao.
Palm oil futures were trading almost 3 percent lower so far this week on renewed concerns over the euro zone debt crisis and wet weather forecast in the U.S. Midwest, where crops are withering due to the worst drought in decades.
Weather updates on Monday forecast some rains for soybean crops in the U.S. Midwest this week, helping to offset a weekly crop condition report from the U.S. Department of Agriculture that downgraded soy crop ratings.
A higher supply of soybeans to be crushed into vegetable oil could narrow spreads between soybean oil and palm oil and draw demand away from the tropical oil.
In Malaysia, exports continued to show weakness from a month ago. In addition to the Intertek Testing Services data, cargo surveyor Societe Generale de Surveillance reported a steeper 18.6 percent monthly decline in exports for the July 1-25 period.
The market is also looking out for El Nino, which could return to Southeast Asia in late 2012, as the hot and dry weather could hurt palm oil output from top producers Indonesia and Malaysia.
Brent crude oil gained slightly on Wednesday, as concerns about threats to oil supply from the Middle East offset worries about oil demand from the euro zone.
In other vegetable oil markets, the most active U.S. soyoil contract for December delivery was up 1.1 percent by 1005 GMT. The most active January 2013 soyoil contract on the Dalian Commodity Exchange closed 0.8 percent lower.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume MY PALM OIL AUG2 2931 +33.00 2899 2931 455 MY PALM OIL SEP2 2940 +28.00 2889 2945 5050 MY PALM OIL OCT2 2951 +25.00 2898 2955 25376 CHINA PALM OLEIN JAN3 7652 -50.00 7604 7742 245320 CHINA SOYOIL JAN3 9336 -72.00 9264 9408 557780 CBOT SOY OIL DEC2 52.91 +0.58 52.08 52.97 14011
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
($1=3.172 Malaysian ringgit) (Editing by Miral Fahmy)