KUALA LUMPUR, Aug 8: Malaysian crude palm oil futures ended off their lows on Monday as buyers returned to the market after noting a rebound in prices of rival US soyoil. A Reuters survey showing that stocks of palm oil at end-July may not have been as high as initially thought also helped, said dealers.

The benchmark third-month palm oil contract on Bursa Malaysia Derivatives, October, closed down 4 ringgit at 1,340 ringgit ($357.61) a ton. It earlier hit a low of 1,333 ringgit, weighed down by a weaker soyaoil and worries about higher production and stocks of palm oil. The high for the day was 1,347 — up 3 ringgit from Friday’s close.

Other traded months settled 3 to 10 ringgit lower. Overall volume totalled 4,256 lots of 25 tons each, higher than Friday’s 3,162 lots but still lower than 6,000 lots averaged on a busy day.

Almost three-quarters of the business was done in the morning, with the market barely moving in the afternoon due to a lack of leads. Dealers said prices, which hit near six-month lows last week, could remain under pressure due to fears of an increase in palm oil production and slackening demand.

A Reuters survey of five plantation firms showed on Monday that output of palm oil in Malaysia could be 5.2pc higher in July than June due to a fresh rise in yields [ID:nKLR263386]

Analysts from five plantation firms that usually participate in the poll had previously forecast a production growth of 3.5 per cent for July. But stocks of palm oil in the market were expected to be lower than initially forecast, they said.

Analysts had earlier put end-July stocks of palm oil at 8.6 Per cent up from June. But Monday’s estimate was only 6.5 per cent higher. There was a pick up in sales towards the end of last month, so that’s why the stocks are revised down despite the rise in production, said a survey participant.

The government-run Malaysian Palm Oil Board will issue on Wednesday production, exports and closing stock numbers for July. Two independent shipping surveyors, Intertek Testing Services and Societe Generale de Surveillance, will issue on the same day export estimates for the first 10 days of August.

Soyaoil futures on the Chicago Board of Trade fell for a second straight day on Friday, with the August contract declining 0.53 cent to 23.62 cents a lb. But in Monday’s electronic session, contracts for Sept through Dec rebounded 0.30 to 0.33 cent.

Soya and palm compete for export destinations and their prices often move in step. In physical dealings of crude palm oil on Monday, August contract was offered at 1,335 ringgit a ton and bid at 1,330 in the southern and central regions of Malaysia.

Trades were reported at 1,330 ringgit in the south and 1,325-1330 in the central zone. —Reuters