Palm oil up 1.5pc on grains, US Fed

Palm oil, which has lost about 20 percent so far this year due to high stocks, got some support from US Federal Reserve Chairman Ben Bernanke's speech that left the door open for further stimulus in the world's No.1 economy.

"The US markets boosted sentiment with the worsening crop scenario there and there was a knee-jerk reaction to the US Federal Reserve's apparent willingness for some stimulus firepower," said a trader with a foreign commodities brokerage.

By midday, the benchmark November crude palm oil contract settled up 1.5 percent at 3,020 ringgit ($1,011.21), traders said. The electronic price feed from the exchange was down due to a technical problem.

Overall traded volume stood at 5,181 lots of 25 tonnes each, far below the usual 12,500 lots, ahead of the long holidays, traders said.

Malaysia's financial markets will be closed from the afternoon of Aug. 29 to mark the Muslim festival of Eid, while Indonesian markets will close for the week.

Traders were also on the lookout for Malaysia's August export data by cargo surveyor Societe Generale de Surveillance that is due for release later on Monday and could show demand solid growth.

"There was some short covering on expectations of higher exports in August compared to July," said another trader.

Brent crude fell below $111 on Monday as oil refiners and terminals along the US east coast weathered the worst of a tropical storm, easing fears of fuel supply disruptions in the world's top oil consumer.

But sentiment in Asian share markets improved on Monday, although the dollar struggled after Bernanke left the door open for further action to stimulate the economy and fight high unemployment, lifting risk appetite.

US soyoil for September delivery edged higher during Asian trade, extending gains from last week's session as a crop survey showed erratic weather had hit grain crops and plantings.

The most active May 2012 soyoil on China's Dalian Commodity Exchange rose 1.5 percent.

Copyright Reuters, 2011