By Michael Taylor JAKARTA, Oct 27 (Reuters) - Malaysian palm oil futures rose to a one-month high on Thursday, as a euro zone debt deal boosted sentiment, with higher crude prices and lower output expectations offering additional support. Benchmark January palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange traded 1.3 percent higher at 2,990 Malaysian ringgit ($955) a tonne, after having earlier touched 2,995, a high not seen since Sept. 23. Traded volumes for the January palm contract stood at 5,788 lots of 25 tonnes each, compared with 14,264 lots on Tuesday, before Wednesday's holiday in Malaysia for the Hindu Diwali festival of lights. "3,000 is not far from here," said a Kuala Lumpur-based trader. "The monsoon weather (season) is in play, and a supportive external market and higher crude oil." Euro zone leaders struck a deal with private banks and insurers on Thursday for them to accept a 50 percent loss on holdings of Greek government bonds as part of a plan to lower Greece's debt burden and try to contain the two-year-old euro zone crisis. A slowdown in Europe, the second-largest palm consuming region after Asia, could weaken demand, although palm oil could maintain its market share in the region as it is the cheapest edible oil. Reuters technical analyst Wang Tao said a bullish target at 3,014 ringgit was intact for palm oil, and a rise above this level would open the way towards 3,133 ringgit. Crude oil rose by more than a dollar after European leaders agreed to boost the region's rescue fund, raising hopes the euro zone debt crisis will be contained. Also aiding palm oil sentiment on Thursday were lower production expectations due to the rainy season in dominant Southeast Asian producers. A weaker version of La Nina may reappear this year, but still triggering above-normal rainfall in Southeast Asia and eastern Australia. "Going into the last quarter of the year, prices have a lot of room to move up," said a Singapore-based analyst. "This is on the back of slowing CPO production growth ... everyone is also looking to the South American (soybean) harvest." "The euro zone is a driver of positive sentiment in the commodities scene but there will still be a lot of volatility," he said on sovereign debt problems, adding that palm prices could now rise 10 percent by the first quarter of 2012. At the same time, demand looks robust, with data earlier this week showing Malaysian exports rose around 15 percent for Oct. 1-25. In comparative markets, U.S. soyoil for December delivery gained about 2 percent in Asian trade, while China's most active May 2012 soybean oil contract <0#DBY:> also rose. Palm, soy and crude oil prices at 0557 GMT Contract Month Last Change Low High Volume M'ASIA PALM OIL NOV1 2992 +42.00 2965 2996 360 M'ASIA PALM OIL DEC1 2998 +43.00 2961 2999 1009 M'ASIA PALM OIL JAN2 2990 +39.00 2957 2995 5788 M'ASIA PALM OIL FEB2 2997 +42.00 2964 2997 1366 DALIAN SOY OIL MAY2 9376 +116.00 9240 9390 516674 CBOT SOY OIL DEC1 51.83 +0.94 50.95 51.89 7479 NYMEX CRUDE DEC1 92.17 +1.97 90.74 92.21 11110 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=3.129 ringgit)

Source