JAKARTA, Oct 7: Malaysian palm oil futures rose nearly 3 per cent on Tuesday, supported by short-covering after the biggest one-day fall in 23 years a day earlier, but traders said sentiment remained weak given poor fundamentals.

Gains for crude oil, a substitute for palm oil use in biofuels, as well as a recovery in Chicago grains and oilseeds futures helped lift prices.

The benchmark December contract on the Bursa Malaysia Derivatives exchange was up 52 ringgit, or 2.86 per cent, at 1,872 ringgit a ton at midday, after slumping by 9 per cent the previous day.

Contracts of other traded months increased between 1 ringgit and 85 ringgit. The overall volume stood at 8,559 lots of 25 tons each.

Crude was up $1.68 at $89.49 a barrel in Asian trade at 0457 GMT. Chicago Board of Trade soyabeans fell the trading limit of 70 cents, or 7 per cent, to $9.22, on Monday, the lowest since Sept. 13, 2007, and have made back some the lost ground.

Fears of a build-up in palm oil stocks amid weak demand may maintain pressure on palm prices near term, another trader said.

Malaysia’s September palm oil stocks are likely to climb 9.3 per cent from a month earlier as output is expected to hit its highest level this year amid a pronounced slowdown in exports, a Reuters poll showed on Tuesday.

The Malaysian Palm Oil Board is due to release September’s palm oil stocks, production and exports data on Friday.

In the physical market, Malaysian palm oil for October and

November delivery stood at 1,900/1,920 ringgit a ton in both souther region and central region. Trades were done at 1,900 ringgit a ton for October delivery in both regions.—Reuters