We present first-principles calculations of the effects of magnetism on the ballistic conductance of a model Pd nanocontact, made of a short Pd monatomic stretched chain placed between two Pd leads, simulated by semi-infinite (100) slabs. The stretching makes the suspended Pd chain generally ferromagnetic. The spin-resolved ballistic conductance, calculated according to the Landauer-Buttiker formula is found to be 0.85G(0) for the spin-up and 1.15G(0) for the spin-down electrons (G(0) = 2e(2)/h is the conductance quantum). The total conductance similar to 2G(0) is lower, but still relatively close to that of the nonmagnetic Pd nanocontact with the same geometry, calculated to be 2.3G(0). To illustrate how magnetism and conductance depend on structural details, we change the three atom chain docking from the top to a hollow surface site, where at the same stress the Pd contact is nonmagnetic and the conductance decreases to 1.8G(0). Overall we find these calculated ballistic conductance values of very similar magnitude to the first histogram peak in the experimental data obtained for Pd at low temperature in mechanically controllable break junctions. We conclude that the 15% conductance changes caused by the onset or the demise of local magnetism, similar in magnitude to geometry-related conductance changes, are probably too small to be used as a diagnostic for the presence or absence of nanocontact magnetism.