UPDATE 2-Malaysian palm oil hits record on $100 crude

(Updates with midday prices, plantation stocks)

By Naveen Thukral

KUALA LUMPUR, Jan 3 (Reuters) - Malaysian crude palm oil futures climbed to a new high on Thursday, rising 2.5 percent, on the back of record soybean oil and crude oil prices.

Traders said prices of palm oil, used in products ranging from cosmetics and confectionaries to biodiesel, could rise further as production takes a hit after monsoon flooding last month.

The benchmark March contract KPOH8 on the Bursa Malaysia Derivatives Exchange rose as much as 77 ringgit to 3,159 ringgit ($956) per tonne, surpassing the previous record of 3,150 set last week. By the midday break, the contract was up 49 ringgit at 3,131 ringgit.

"It will go up, look at what is happening to crude oil and soybean oil," said a trader with a domestic broker. "We are in the middle of a strong bull run."

Other traded months rose between 42 and 65 ringgit. Overall trade stood at 4,432 lots of 25 tonnes each.

Oil prices CLc1 fell slightly on Thursday after leaping to a lifetime high of $100 the day before amid a new-year rush of investor demand fuelled by expectations of thinning U.S. stockpiles, the falling U.S. dollar and geopolitical risks. [ID:nSYD1245]

Vegetable oils, such as palm and soybean oil, often track crude oil prices because of growing use of edible oils in the making of biofuels, which compete with petroleum.

Soyoil notched an all-time high when the August contract BOQ8 touched 52.43 cents, surpassing the previous record of 51 cents a lb set in October 1974. [ID:nN02120676]

Shares of Malaysian palm plantation firms, which have hit record levels on bullish prices, rose further on Thursday.

Planters such as Sime Darby (SIME.KL), IOI Corp (IOIB.KL), KL Kepong (KLKK.KL) and Asiatic Development ASIA.KL were up in contrast to the broader market which was trading lower .KLSE. The stock market's plantation index .KLPL was up 1.5 percent.

FLOODS & LOWER OUTPUT

Dealers said palm oil has potential to extend gains on concerns over lower production.

"Ultimately it will go up further as local factors will come into play from next week," said another trader referring to December palm oil numbers to be unveiled by the Malaysian Palm Oil Board next week.

"Not only December will be lower, there will be a follow-through impact of flooding in January."