Palm oil rises on speculative buying, short covering

KUALA LUMPUR, Oct 14 (Reuters): Malaysian palm oil futures rose on Monday, supported by a combination of speculative buying and short covering, although gains were capped by weaker crude oil prices.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 22 ringgit, or 0.51 per cent, to 4,372 ringgit ($1,018.88) a metric ton by the midday break.

The contract had gained 2.76 per cent in the previous session.

There is a combination of speculative buying and short covering in the market on Monday, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

"Though we are seeing the lower estimates for Malaysian production, Indonesian production are rocketing ahead with a double digit growth. This could cap gains once the speculative buying wanes off," he said.

Dalian's most-active soy oil contract rose 0.36 per cent, while its palm oil contract climbed 2.06 per cent.