KUALA LUMPUR, March 28: Malaysia's palm oil futures jumped 2.2 per cent on Wednesday, with the benchmark contract hitting a fresh three-month high on gains in crude and soyaoil.

The benchmark third-month June contract on the Bursa Malaysia Derivatives Exchange climbed 45 ringgit, or 2.2 per cent, to 2,048 ringgit ($591) a ton, a level not seen since December 28.

Other traded contracts rose between 20 and 45 ringgit, in overall volume of 11,755 lots of 25 tons each.

The market has made strong gains because crude oil is up due to uncertainties in the Gulf, said one dealer. There is also some short covering as soyaoil is up. The market is just 14 ringgit below an eight-year high of 2,062 ringgit reached in December, when floods disrupted supplies.

Oil held at $64 a barrel on Wednesday, with traders still rattled by a $5 spike overnight on a rumour, quickly dismissed by the United States, that a US naval vessel had clashed with Iran.

Malaysian palm oil prices soared 40 per cent last year on the back of biodiesel demand and the market is still holding on to strong gains.

In the physical market, crude palm oil for March shipment in the southern region was quoted at 2,045/2,050 ringgit a ton, while trades were done between 2,030 and 2,045 ringgit.—Reuters