Updates with closing prices, adds milestone in paragraph 2

By Mei Mei Chu

KUALA LUMPUR, June 2 (Reuters) -Malaysian palm oil futures closed higher on Friday for a second straight session, as stronger rival oils and concerns about the impact of El Nino stoked buying interest after heavy losses earlier in the week.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange gained 111 ringgit, or 3.39%, to 3,390 ringgit ($764.37) a tonne, its highest daily gain in nearly a month.

For the week, the contract has declined 5%.

The recent strong reversal in prices widened arbitrage trading in destination markets, especially in the forward month contracts, said Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8 Pte Ltd.

Palm oil demand is likely to improve in June and through the second half of the year, he said.

Early signs of hot, dry weather caused by El Nino are threatening food producers across Asia, while American growers are counting on heavier summer rains from the weather phenomenon to alleviate the impact of severe drought.

Dalian's most-active soyoil contract DBYcv1 rose 2.2%, while its palm oil contract DCPcv1 gained 2%. Soyoil prices on the Chicago Board of Trade BOcv1 rose 1.2%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Malaysia's financial markets will be closed on Monday, June 5, for a public holiday. Trading will resume on Tuesday.

($1 = 4.4350 ringgit)

Reporting by Mei Mei Chu; Editing by Shailesh Kuber, Sonia Cheema and Rashmi Aich

For a table on Malaysian physical palm oil prices, including refined oil, Reuters Terminal users can double click on or type OILS/MY01. * To view freight rates from Peninsula Malaysia/Sumatra to China, India, Pakistan and Rotterdam, please key in OILS/ASIA2 and press enter, or double click between the brackets. * Reuters Terminal users can see cash and futures edible oil prices by double clicking on the codes in the brackets: To go to the next page in the same chain, hit F12. To go back, hit F11. Vegetable oils OILS/ASIA1 Malaysian palm oil exports SGSPALM1 CBOT soyoil futures 0#BO: CBOT soybean futures 0#S: Indian solvent SOLVENT01 Dalian Commodity Exchange DC/MENU Dalian soyoil futures 0#DBY: Dalian refined palm oil futures 0#DCP: Zhengzhou rapeseed oil 0#COI: European edible oil prices/trades OILS/E