Malaysian crude palm oil futures bounced off 5-1/2-month lows but remained weak on Thursday, weighed down by losses in main rival US soyaoil. The benchmark palm oil contract on Bursa Malaysia Derivatives, October, ended down 14 ringgit at 1,352 ringgit ($360.53) a tonne. It fell to 1,343 ringgit in the morning, the lowest level since February 22.
Dealers said the market appeared oversold and the contract stay above the 1,350 ringgit support level.
Other traded months settled down 12 to 16 ringgit.
Overall volume doubled to 5,647 lots of 25 tonnes each, from Wednesday's 2,811 lots.
"This is a market very dependant on swings on the CBOT and yesterday's CBOT was indeed volatile," said a palm oil futures dealer in Kuala Lumpur.
Talk of imminent rain in key US soya growing patches drove down soyaoil futures on the CBOT, or Chicago Board of Trade, on Wednesday after fears of drought had powered a rally for weeks.
August soyaoil ended Wednesday's trade down 0.72 cent at 24.30 cents a lb. The market slid further in Thursday's electronic session, with the September contact losing 0.25 cent.
Aside from soyaoil, the market was also weighed down by fears of an increase in palm oil production and stocks for August, dealers said.
Five plantation firms surveyed by Reuters last week put production of palmoil in Malaysia, the world's top producer, at 3.5 percent higher in July than June due to a jump in yields. The market has since been talking of a 5.0 percent growth.
Societe Generale de Surveillance (SGS), the main independent surveyor of Malaysian oil palm shipments, had estimated exports in July to have dropped almost 14 percent from June.
In physical dealings of crude palm oil on Thursday, August contract was offered at 1,340 ringgit a tonne against bids of 1,335 ringgit in the southern and central regions of Malaysia.
Trades were reported at 1,345-1,335 ringgit in both regions.
PALM OIL FUTURES:
August (south): 1340
Open/High/Low: 1357/1362/1343
Previous close: 1355
PALM OIL PHYSICALS:
October (third month): 1352
Previous settlement: 1366
FUTURES: Ends weaker in line with US soyaoil, but off 5-1/2-month lows.
PHYSICALS: Also down.