22/12/2011 (Reuters) - Malaysian crude palm oil futures rose to its highest in nearly two weeks on Wednesday on expectations of rising demand, firmer comparative oils and an improving euro zone debt outlook. 

European stocks rallied and the euro was well bid as investors priced in an improvement in the economic outlook and looked forward to a big take up by banks of the European Central Bank's first-ever offer of three-year loans.  

Benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange touched a high at 3,072 Malaysian ringgit per tonne, a level last seen on Dec. 9. 

"The market is moving to the year-end slightly firmer," said a Kuala Lumpur-based trader. "Monday is a holiday next week, so a lot of people are closing positions."

"Crude is higher and other markets are stabilizing," he added. "The sovereign debt issue is going to be a trading issue into next year."

Malaysian financials markets will close on Monday for Christmas.

Traded volumes for the March palm contract were at 13,242 lots of 25 tonnes each, compared with 9,098 lots on Tuesday.

Palm oil is on course for a 19 percent fall this year, however, weighed down in part by doubts surrounding the euro zone debt crisis and global economic uncertainty.

"Prices will be around 3,100 ringgit," said a Jakarta-based analyst when asked about prices towards the year-end. 

"There will be speculation trades on next year, with strong demand ahead of next year ... ahead of the Chinese new year."

Data from the previous session showed that exports from Malaysia are falling as top buyers slow orders before the year end, giving some breathing space to palm oil stocks that have started to tighten a little.  

Palm oil traders also kept an eye out for weather developments in South America curbing the soy crop that is crushed into competing soyoil. 

U.S. corn fell, snapping three sessions of gains, while soybeans were little changed near a 4-week top on forecasts of rain in parts of Brazil and Argentina that had been hit by dry weather.  

U.S. soyoil for January delivery inched higher in Asian trade, while the most active September 2012 soyoil contract on China's Dalian commodity exchange also gained. 

"There is no clear direction in the soybean market right now but it may be preparing for a strong rebound in the new year," said Zhan Zhi Hong, an oil analyst with Shenzhen-based China Merchants Futures.

"Fundamentally, the weather conditions in South America will not affect the market for too long." 

The monsoon season in top Southeast Asian palm oil producing countries has offered some support in recent weeks, with expectations of lower output. 

"There is talk that production in December may decline by about 20 percent, coupled with a positive external market leading the rebound," said a second Kuala Lumpur-based trader. 

In other oil markets, Brent crude futures rose above $107, gaining for a third straight day, after upbeat U.S. data pointed to a recovery in demand growth in the world's biggest oil consumer amid fears of a disruption in supplies.  

  Palm, soy and crude oil prices at 1010 GMT
                                                                                                        
  Contract                 Month    Last   Change     Low    High  Volume
  M'ASIA PALM OIL   JAN2    3079   +59.00    3034    3079     390
  M'ASIA PALM OIL  FEB2    3075   +54.00    3032    3075    3782
  M'ASIA PALM OIL  APR2    3065   +54.00    3024    3065    2054
  DALIAN SOY OIL   SEP2    8826    +0.00     8818    8864  191108
  CBOT SOY OIL      JAN2   49.65    +0.27   49.30     49.69    5828
  NYMEX CRUDE      FEB2   98.05    +0.81   97.50   98.49   14400
                                                                                                       
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil in Chinese yuan per tonne
  Crude in U.S. dollars per barrel.
  ($1 = 3.1784 Malaysian ringgit)