27/12/2012 (Reuters) - Malaysian palm oil futures rose to a one month-high in light trade on Wednesday with investors turning their focus to seasonal rains that could trigger floods and curb edible oil supply in Southeast Asia.

In Malaysia, the world's No.2 producer, the weather office has issued warnings of heavy rains in the coming week that may cause floods in major oil palm growing areas that account for 75 percent of national output.

Rains and floods can disrupt logistics and harvesting, lowering high stocks and lifting prices that are on track for a yearly loss of above 23 percent -- steepest decline since the 2008 financial crisis.

"The floods will ensure that there's no major sell off in the market," said a trader with a local commodities brokerage in Kuala Lumpur.

"Everybody wants to square their books, that's why you don't see much range nowadays. I can safely say that 2,200 ringgit is already the bottom for the market."

The benchmark March contract on the Bursa Malaysia Derivatives Exchange inched up 0.1 percent to close at 2,430 ringgit ($796) per tonne, slightly lower than its intraday high at 2,440 ringgit, a level unseen since Nov 27.

Total traded volumes stood at 16,062 lots of 25 tonnes each, much lower than the usual 25,000 lots as trading activity slowed towards the end of the year.

Despite the heavy rains, palm oil is still trading at a wide discount to competing soyoil that could draw in demand from big Asian consumers like India and China next year.

This comes as the soy exporting Americas face adverse weather that can crimp the supply of oilseed available for crushing into edible oils.

"The wild card is supply in the U.S and South America -- if there is tight supply then the market will be looking forward to our production," the trader said.

"If there is any production deficit in January, February and March, the only oilseed that can provide that kind of quantity will be palm."

Malaysian palm oil exports in the first 25 days of December inched up 0.5 percent from a month ago, on higher demand from India and stronger crude palm oil exports, according to data from cargo surveyor Intertek Testing Services.

Another cargo surveyor Societe Generale de Surveillance reported a 3 percent rise in shipments for the same period.

Brent crude climbed above $109 per barrel in thin trade as investors clung to hopes U.S. lawmakers would come up with a last-minute deal to avert a looming fiscal crisis in the world's largest oil consumer.

In other vegetable oil markets, the most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.4 percent lower. The U.S. markets were closed for a holiday.

  Palm, soy and crude oil prices at 1004 GMT

  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      JAN3    2308    +9.00    2289    2309     256
  MY PALM OIL      FEB3    2386    +8.00    2374    2389    2224
  MY PALM OIL      MAR3    2430    +2.00    2420    2440    6924
  CHINA PALM OLEIN MAY3    6870   +10.00    6842    6930  523820
  CHINA SOYOIL     MAY3    8572   -36.00    8542    8650  552382
  CBOT SOY OIL     MAR3   49.35    +0.00    0.00    0.00       0
  NYMEX CRUDE      FEB3   89.15    +0.54   88.59   89.21    3634

  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
  ($1=3.067 ringgit)