27/03/2012 (Business Recorder) - Malaysian palm oil futures extended gains to a new nine-month high on Monday as strong exports data and drought woes in soy-producingSouth Americaboosted investor sentiment.

Agriculture markets, including palm oil, are set to face choppy trade ahead of theUSprospective plantings report due on Friday, which will gauge output of soybeans that is usually crushed into competing soybean oil.

Palm oil has gained 8.7 percent since the start of 2011 on Asian demand chasing sluggish production, limited soyoil supplies flowing fromSouth Americaalthough now any prospect of higherUSsoy harvests may rein in gains.

"A higher price is expected as the commodity closed higher for the third consecutive week after breaking a high of 3,270 ringgit," said a trader with a local commodities brokerage inKuala Lumpur.

"There's not much change in the fundamentals. There's some speculative buying going on, and nobody knows when it's going to end," the trader added.

By themiddaybreak, benchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.8 percent at 3,452 ringgit ($1,123) per tonne after going as high as 3,457 ringgit, a level unseen since last June.

Traded volumes stood at 11,438 lots of 25 tonnes each, slightly lower than the usual 12,500 lots.

Malaysian exports rose 7.7 percent for the first 25 days of March from a month ago, according to cargo surveyor Intertek Testing Services, continuing a strong export trend seen in the month.

Another cargo surveyor Societe Generale de Surveillance will issue export data later in the day.

Traders are keeping an eye on the US Department of Agriculture planting forecasts due at the end of the month to gauge soybean output for the year.

Market players will also be eyeing comments from leading analysts Dorab Mistry and Thomas Mielke, who will be presenting their outlook on edible oils this year at the China Oils and Oilseed Conference inBeijingon Monday and Tuesday.

Brent crude edged below $125 on Monday as a possible resumption in crude production fromSouth Sudanoffset supply worries on news of a sizeable drop in Iranian oil exports due to Western sanctions.

In other vegetable oil markets, the most activeUSsoyoil contract for May delivery gained 0.4 percent in Asian trade while the most active September 2012 soyoil contract onChina's Dalian Commodity exchange jumped 1.3 percent.