KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives
exchange ended lower for a second day Wednesday on speculative liquidation,
tracking losses in most commodity markets, said trade participants.

  The benchmark November CPO contract on the Bursa Malaysia Derivatives ended
MYR58 lower at MYR2,245 a metric ton after trading in a MYR2,220-MYR2,280/ton
range, the lowest level in nearly a month for the benchmark contract.

  CPO prices came under selling pressure as soyoil futures on the Chicago Board
of Trade fell for the second day while an overnight decline in crude oil
futures pulled prices down.

  In a single day, CPO prices have breached key support levels at MYR2,300,
MYR2,280 and MYR2,235/ton, making the market vulnerable to further losses, said
trade participants.

  A Kuala Lumpur-based trading executive pegged next support at MYR2,150 if the
slide continues Thursday.

  "Sentiment may continue to be driven by external markets even though CPO's
fundamental outlook is construed as supportive (for prices)."

  September soyoil, which settled 46 points lower on CBOT Tuesday at 34.53
cents a pound, was trading 38 points lower toward the end of trade on the BMD.

  While lower export demand in August may have damped market confidence,
traders are expecting exports to pick up in the first half of September.

  "India may be purchasing more ahead of the Diwali festival. This may boost
exports in September," said a Singapore-based exporter.

  Malaysia's palm oil output in September, on the other hand, may be flat to
slightly lower, which may result in some supply tightness. But traders are
concerned that domestic palm oil stock levels may rise if the pickup in demand
remains sluggish.

  Prices may move between MYR2,200-MYR2,280 in the near term, said trade
participants.

  Separately, Indonesia's PT Perkebunan Nusantara sold 5,000 tons of CPO
offered in a government auction Wednesday.

  However, a further 5,500 tons of CPO offered was unsold as bids were below
PTPN's offer price of IDR6,981-IDR7,185/kg.

  In the cash market, palm olein for January/February/March was traded in the
morning session between $675-$687.50/ton, FOB Malaysian ports, said a
Singapore-based trading executive. He added that no trades were reported in the
afternoon session as the bid-offer gap was around $15-$20/ton.

  Cash CPO for prompt shipment was offered MYR65 lower at MYR2,340/ton.

  Open interest for CPO futures rose to 84,117 lots from 83,466 lots Tuesday
while trading volume fell to 16,213 lots from 17,402 lots. One lot is
equivalent to 25 tons.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT:

Month      Close    Previous   Change   High    Low
Sep 09     2,334    2,395      Dn 61    2,360   2,315
Oct 09     2,274    2,335      Dn 61    2,307   2,250
Nov 09     2,245    2,303      Dn 58    2,280   2,220
Dec 09     2,229    2,296      Dn 67    2,282   2,213