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KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange rose for the second day Thursday on bargain-hunting, after several days of declines following a broad asset selloff due to global economic concerns.

Benchmark October CPO on the Bursa Malaysia Derivatives ended at MYR2,993 a metric ton, a 1.9% rise from Wednesday's close.

The market also rallied on expectations that the U.S. Department of Agriculture may lower soybean output projections this year in its monthly supply-demand report due later in the global day.

Palm oil may rise above MYR3,000/ton in the coming session, supported by strong fundamentals, with outbound sales higher for the next few weeks as Chinese importers stock up ahead of the Mid-Autumn festival in September and a week-long national holiday in October, a vegoil exporter in Singapore said.

Data from cargo surveyor SGS (Malaysia) Bhd., showed Aug. 1-10 shipments to China are up 21% from the previous month at 149,833 tons.

Meanwhile, palm oil output in Malaysia and Indonesia, the world's top two producers, may be relatively low in August, since harvesters are on holiday during the Islamic fasting month of Ramadan that began last week.

"In the near term, prices will continue to be relatively strong," Alvin Tai, analyst at Kuala Lumpur-based OSK Investment Bank said.

But the rally may falter when production resumes in September, following the end of Ramadan, pushing end-month stocks higher, said a commodities trader in Singapore.

In the cash market, refined palm olein for September was offered unchanged at $1,140/ton, while cash CPO for prompt shipment was also unchanged at MYR3,110/ton.

Traded volume in crude palm oil futures on the BMD rose to 30,747 lots from 23,960 lots Wednesday. One lot equals 25 tons.

Open interest was 129,910 contracts compared with 129,122 contracts.

Closing BMD CPO futures prices in MYR/ton at 1030 GMT: 
 
Month   Close  Previous   Change    High    Low 
Aug'11  3,110     3,105   Up   5   3,115  3,085 
Sep'11  3,053     3,000   Up  53   3,055  3,000 
Oct'11  2,993     2,937   Up  56   2,996  2,938 
Nov'11  2,963     2,907   Up  56   2,967  2,915
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