21/3/07 (Reuters) KUALA LUMPUR  -  Malaysian palm oil futures rose marginally on Wednesday tracking gains in rival soybean oil on the Chicago Board of Trade.

The benchmark third-month June contract on the Bursa Malaysia Derivatives Exchange was up 7 ringgit at 1,984 ringgit ($570) per tonne at the end of the morning session.

“The market is currently firm with positive support from the soyoil market,” said one dealer. “The market will hold on to the gains if it crosses the 2,000 ringgit level.”

Other traded months rose between 5 and 9 ringgit Overall volume was 5,976 lots of 25 tonnes each.

The market rose 1.2 percent on Monday on hopes of better exports and it is off an eight-year high of 2,062 ringgit reached in December when floods disrupted deliveries.

Soybean futures at the Chicago Board rose on Tuesday on the back of the November 2008 contract as the struggle to secure bean acres for next year began this week, traders said.

Soybean oil ended 0.18 to 0.30 cent per lb higher, with May up 0.25 cent at 31.24 cents.

In electronic trade during Asian hours on Wednesday, the May contract was up 0.09 cent at 31.33 cents.

Palm oil often tracks the soybean market because both are used in products ranging from food and cosmetics to biodiesel.

Exports of Malaysian palm oil products for March 1-20 rose 0.8 percent to 617,142 tonnes from 612,057 tonnes shipped between February 1-20, cargo surveyor Intertek Testing Services said.

Another cargo surveyor, Societe Generale de Surveillance, said exports during the period fell 6.1 percent to 596,774 tonnes from 635,215 tonnes shipped between February 1-20.

Palm oil prices are set to jump more than 20 percent by year-end as global oilseed stocks get depleted and demand from the food and fuel sectors surges, industry officials said at a price outlook conference in Kuala Lumpur last week.

Malaysian palm oil, which gained almost 40 percent last year, could move slightly downward in the near term, but surging Indian food demand and Europe’s insatiable appetite for biofuels will ensure the commodity holds on to gains this year.

In Malaysia’s physical market, crude palm oil for March shipment in the southern region was quoted at 1,990/2,000 ringgit per tonne. Trades were done between 1,985 and 1,990 ringgit a tonne. reuters