13/09/2012 (Reuters) - Malaysia crude palm oil futures edged up on Wednesday after Germany's top court backed a euro zone bailout fund, raising hopes that the debt crisis will not spread further and hurt global economic growth.

German's top court had earlier ruled in favour of a 700 billion euro bailout fund, lifting global stocks and shoring up Brent crude oil prices.

"I think what happened just now on the German court ruling is something that is quite encouraging for the commodity market although it comes with conditions," said Phillip Futures analyst Ker Chung Yang.

"The approval of the European Stability Mechanism (ESM) is something we have been waiting for. It is a breakthrough for the crisis," he added.

The benchmark November contract on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to close at 2,930 ringgit ($950) per tonne. Earlier in the day, the market dropped on concerns of higher production fuelling a stock build up.

Total traded volume stood at 46,120 lots of 25 tonnes each, nearly double the usual 25,000 lots as traders piled back into the market to take positions.

Reuters technicals market analyst Wang Tao said palm oil is likely to drop to 2,869 ringgit per tonne, driven by a downward wave. A rebound from the current level will be limited to 2,947 ringgit.

Industry analyst James Fry told an industry seminar earlier in the day that palm oil prices could fall to 2,450 ringgit per tonne in the first quarter of 2013 if Brent crude dropped to $80 a barrel.

Palm oil stocks in August surged to a 10-month high of 2.1 million tonnes, exceeding market expectations, the Malaysian Palm Oil Board (MPOB) said earlier in the week.

While production is expected to be stronger, cargo surveyors have pointed to stronger demand this month. For the first ten days of September, Malaysian palm oil exports jumped 30 percent as the country shipped out more crude to India thanks to a bigger tax free quota of the grade. 

India's palm oil imports in the new marketing year will rise 7.9 percent to 7.5 million tonnes as the world's top edible oil buyer struggles to meet demand due to faltering local oilseed output, an industry official told Reuters.

Brent crude oil rose for a fifth straight session on Wednesday, lifted by the German court decision on the giant bailout and hopes the Federal Reserve will ease monetary policy this week.

In other vegetable oil markets, U.S. soyoil for December delivery rose 1 percent with some traders expecting the U.S. Department of Agriculture to slash soybean production estimates following a crop-damaging historic Midwest drought.

The most active January 2013 soyoil contract on the Dalian Commodity Exchange fell 0.2 percent.

  Palm, soy and crude oil prices at 1048 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      SEP2    2832   -14.00    2830    2832       2
  MY PALM OIL      OCT2    2879   -14.00    2851    2882    2166
  MY PALM OIL      NOV2    2930   +11.00    2887    2935   23968
  CHINA PALM OLEIN JAN3    7936   -26.00    7880    7948  247238
  CHINA SOYOIL     JAN3   10016   -22.00    9942   10030  481606
  CBOT SOY OIL     DEC2   56.36    +0.48   55.68   56.57    8853
  NYMEX CRUDE      OCT2   97.75    +0.59   96.67   98.06   31373

  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