KUALA LUMPUR, July 2: Malaysian crude palm oil futures rose 1.2 per cent on Wednesday as crude oil prices hovered near record levels, bolstering vegetable oil markets from China to the United States.

But slowing overseas demand last month weighed on palm oil, which is about 19.3 per cent off a record high of 4,486 ringgit per ton. The benchmark September contract on the Bursa Malaysia Derivatives Exchange settled up 41 ringgit at 3,616 ringgit ($1,105).

The spread between soyoil and palm oil is widening and although there is no additional demand coming in, this places palm oil in a good position when traditional buyers start coming in, said a trader with a foreign brokerage.

Refined palm oil products at Rotterdam retailed between $1,190 and $1,277 per ton, up to a 25 per cent discount to degummed soyaoil, Reuters estimates showed. A couple of months ago, the discount was about 18-20 per cent, traders said.

Traders expect countries from China to Pakistan to start buying palm oil, which is used as a cooking oil, at least two months ahead of the Asian festival season that begins in September.

Other traded months rose between 27 and 59 ringgit Overall trade dropped to 6,805 lots of 25 tons each from the usual 10,000 lots.

Oil rose towards $142 a barrel on Wednesday, within sight of a record high, boosted by forecasts that global supply will lag demand and further weakness in the dollar.

US soyaoil futures mostly extended gains in Asia on Wednesday amid worries about a drop in US soyabean stocks to near record lows and strength in crude oil markets.

In Malaysia’s physical market, crude palm oil for July shipment in the southern region was quoted at 3,610/3,620 ringgit a ton. Trades were done between 3,580 and 3,620 ringgit.—Reuters