SINGAPORE: Malaysian palm oil futures rose to the highest in more than two months on Wednesday, as worries persisted over dry weather in the US Midwest that could lead to lower soybean yields.

Palm oil has rallied 4.5 per cent so far this week on concerns over tighter global oilseed supplies, as a smaller amount of soybeans for crushing into soybean oil could channel demand to competing palm oil.

Cargo surveyor data pointing to healthy export demand for the tropical oil also supported prices. Malaysian palm exports for the August 1-25 period rose as much as 7.5 per cent from a month ago, supported by stronger purchases from Europe, China and India.

"Weather play is still lending some strength to the palm market, and there are also expectations that this month's exports should be higher than the previous month," said a trader with a foreign commodities brokerage in Kuala Lumpur.

"Palm oil will be testing the 2,500 ringgit level, but we might also see some profit-taking from the past few days' rally."

By the mid-day break, the benchmark November contract on the Bursa Malaysia Derivatives Exchange had gained 0.9 per cent to RM2,473 per tonne, near its intraday high at RM2,476, a level unseen since June 20.

Total traded volume stood at 23,096 lots of 25 tonnes each, well above the usual 12,500 lots.

Technicals showed palm oil may retrace moderately to RM2,429 before rising towards RM2,491, as it faces a resistance at RM2,462, Reuters market analyst Wang Tao said.

Rising palm exports and potentially lower output in Malaysia, the world's No.2 palm producer, could help ease end-August stocks. Inventory levels inched up one per cent to 1.66 million tonnes in end-July from a month ago.

In other markets, crude oil rose more than US$2 a barrel, with Brent pushing above US$117 and the US benchmark soaring to its highest in over two years, amid worries a possible military strike by Western powers against Syria could hit Middle Eastern crude supply.

In vegetable oil markets, the US soyoil contract for December rose 0.3 per cent in early Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange climbed 0.1 per cent.-- Reuters