KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives
exchange ended lower Friday, erasing the previous day's gains in volatile trade
as prices caved in under heavy selling pressure due to an overnight fall in
soyoil futures while weak external markets weighed on prices.

  The benchmark October CPO contract on the Bursa Malaysia Derivatives settled
MYR74 lower at MYR2,441 a metric ton after trading in a MYR2,424-MYR2,510/ton
range.

  Prices were very choppy, swinging in positive and negative territory after a
sharp fall overnight in soyoil futures and fall on the Dalian Commodity
Exchange due to panic selling as investors rushed to square off positions and
liquidate longs, said trade participants.

  But prices came off the day's low as soyoil and crude oil rebounded, while
fresh buying from day traders supported prices, traders said.

  "It was a roller coaster ride for prices today. Many traders didn't expect
soyoil prices to fall sharply. Nevertheless, price recovery was swift, and some
traders may hold off trading for awhile as prices are too volatile," said a
Kuala Lumpur-based trading executive.

  September soyoil futures on the Chicago Board of Trade, which ended 94 points
lower Thursday at 37.64 cents a pound, were up 11 points by the end of trade on
the BMD.

  September crude oil was up 12 cents at $70.64 a barrel on Globex at 1021 GMT.

  Traders said CPO prices may stay rangebound between MYR2,400-MYR2,500 should
palm oil exports for the Aug. 1-15 period meet market expectations.

  Traders estimate Malaysia's palm oil shipments for the period at 665,000
tons, up 1% from 653,474-659,143 tons estimated for the same period in July.

  Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd are due to
announce Malaysia palm oil export estimates Monday.

  While prices ended lower, week-on-week, prices have risen 5.4% from last
Friday's close of MYR2,340/ton. Open interest on the BMD has risen as well,
indicating the market rally may be sustainable, said another Kuala Lumpur-based
trading executive.

  Demand was a tad subdued in the cash market as choppy trade on the BMD kept
buyers on the sidelines, said trade participants.

  In the cash market, cash palm olein for January/February/March shipment was
traded earlier at $750/ton, $745/ton and $750/ton, FOB Malaysian ports, said a
Singapore-based trading executive, adding the bid-offer gap was around
$10-$15/ton.

  Earlier in the day, Minister for Plantation Industries and Commodities
Bernard G. Dompok said Malaysia's August palm oil inventories may remain
unchanged from a month earlier amid lower palm oil output and rising demand for
the vegetable oil.

  Malaysia's end-July CPO stocks were estimated down 5.7% on month at 1.33
million tons, according to government statistics.

  Cash CPO was offered unchanged at MYR2,500/ton.

  Open interest for CPO futures rose to 82,472 lots from 79,627 lots Thursday.
Trading volume rose to 22,927 lots from 20,657 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
Aug 09     2,500    2,520      Dn 20    2,500   2,500
Sep 09     2,461    2,525      Dn 64    2,516   2,444
Oct 09     2,441    2,515      Dn 74    2,510   2,424
Nov 09     2,437    2,489      Dn 52    2,494   2,409