JAKARTA, Jan 2: Malaysian palm futures closed up more than 2 per cent on the first trading day of 2009 as strong crude oil, gains in soybean, and bullish exports offered support, traders said.

The benchmark March palm oil contract on the Bursa Malaysia’s Derivatives Exchange finished up 45 ringgit, or 2.65 per cent, at 1,740 ringgit ($502) per ton.

The market had a positive tone on the back of strong crude oil, which went up a lot before the holidays, and at the same time, exports were quite good,” said a dealer with a foreign brokerage firm.

Other traded contracts gained between 26 ringgit and 52 ringgit. Overall volume was thin at 8,947 lots of 25 tons each.

Malaysian palm futures dropped 44.43 per cent in 2008, the biggest yearly decline ever, but could see a continuation of their recent rebound at the start of 2009 as exports pick up.

Cargo surveyor Societe Generale de Surveillance said on Wednesday that exports of Malaysian palm oil products for December rose 22.2 percent to 1,642,340 tonnes from November.

Another cargo surveyor, Intertek Testing Services, said on Friday exports of palm oil products for December rose 24.5 per cent to 1,654,700 tons from November.

December export numbers were at an all-time high for monthly exports as producers shipped cargoes which were not taken earlier by buyers, another leading dealer in Malaysia said.

Stronger exports are key to reducing Malaysian palm oil stocks, which hit a record high of 2.27 million tons in November amid higher production and weak demand.

Palm oil futures are expected to trade in a narrow range as players await export numbers in the first ten days in January and a slew of palm oil data from the Malaysian Palm Oil Board in the coming weeks, dealers said.

I still think it may fall back to 1,600 ringgit. It will be difficult to hold on to this level, at around 1,700 ringgit, unless January export numbers are strong, said a dealer with a Malaysian brokerage firm.

But the seasonal decline in palm oil production for the period January to March, and low prices of palm oil may lure more demand, offering support on prices, he said.

In Indonesia, the world’s largest palm oil producer, producers did not hold a palm oil auction. The next auction will be on Jan. 5.—Reuters