KUALA LUMPUR: Shares of most palm plantation companies outperformed the benchmark stock index on Monday after Malaysia's palm oil futures hit three-year highs, continuing a weather-driven rally which picked up pace in December.

At 0642 GMT, Kuala Lumpur Kepong was up 5.2 percent at 22.72 ringgit, IOI rose 0.5 percent to 5.78 ringgit and IJM Plantations added 1 percent to 3.03 ringgit.

Genting Plantations was at 8.65 ringgit, up 0.1 percent and Sime Darby gained 0.3 percent to 9.32 ringgit. Malaysia's benchmark stock index was up 0.3 percent at 1,535.83 points.

"With food inflation becoming a real concern, more people may switch to using palm oil and with output now affected by the weather, the high price of palm oil will certainly be sustained," said an institutional dealer with a bank-backed brokerage.

Floods in Malaysia's Johor and Sabah states last week slowed palm oil harvesting, triggering a surge in prices before the long weekend holiday. Although the rains and floods have eased, traders are expecting lower production.

By 0642 GMT, the benchmark April crude palm oil contract on Bursa Malaysia Derivatives fell half a percent to 3,874 ringgit ($1,272.877) per tonne as traders booked in profits after the ringgit strengthened against the U.S. dollar.

Earlier in the session, the contract climbed as high as 3,915 ringgit per tonne a level unseen since March 10, 2008.

Reuters technical analysis showed Malaysian palm oil prices may hover around 3,905 ringgit per tonne on Monday before it resumes its uptrend towards a bullish target of 4,060 ringgit.