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DJ. Crude palm oil futures on Malaysia's derivatives exchange hit an 8-week low in intraday trade Friday, but recovered on the back of robust SGS export numbers as well as expectations of further cuts to U.S. soybean output ahead of a report by the U.S. Department of Agriculture due late Friday.

The benchmark October contract at Bursa Malaysia Derivatives ended 0.6% higher at 2,882 ringgits a metric tons after moving both ways toward the end of trade.

Analysts surveyed by Dow Jones Newswires expect the USDA to cut its estimate for the country's soybean production in the marketing year starting Sept. 1 by 8.7% to 2.79 billion bushels.

Some market participants bought futures to speculate on the possibility of the USDA cutting its forecasts more than analysts expect, a Kuala Lumpur-based trader said, adding that prices could rebound to the MYR3,200/ton level in the coming weeks due to persistent weather-related supply risks to the U.S. Midwest soybean crop.

Palm values may rise on the back of an overall stronger soybean complex, which will lift soyoil as well, ANZ said in a research note Friday, adding that CPO futures will likely remain well supported at $900/ton (MYR2,800/ton) in the near term.

"This price is also a key support level that has historically uncovered demand," it added.

Intertek data this morning were slightly bearish but SGS export numbers released Friday afternoon helped improve market sentiment, traders said.

Malaysia's Aug. 1-10 palm oil exports fell 1.8% from a month earlier to 357,372 tons, cargo surveyor Intertek Agri Services said Friday. However, SGS data put Aug. 1-10 exports at 354,614 tons, up 6.8% from the July 1-10 period.

Malaysia's July palm oil exports fell 15% to 1.30 million tons, the Malaysian Palm Oil Board said Friday.

July crude palm oil output rose 15% from June to 1.69 million tons while end-July palm oil stocks rose 18% from end-June to 2 million tons, the highest level since February, MPOB data showed.

However, these numbers were mostly brushed aside as they were in line with market expectations, traders said.

In the cash market, refined palm olein for August was offered $5 lower at $950/ton while cash CPO for prompt shipment was offered MYR30 lower at MYR2,750/ton.

Open interest on the BMD was 142,561 lots, versus 129,206 lots Thursday. One lot is equivalent to 25 tons.

A total of 28,006 lots of CPO were traded versus 14,364 lots Thursday.

 
Ending BMD CPO futures prices in MYR/ton: 
 
Month   Close  Previous  Change   High    Low 
Aug'12  2,830     2,817     +13  2,750  2,750 
Sep'12  2,843     2,827     +16  2,843  2,800 
Oct'12  2,882     2,865     +17  2,885  2,839 
Nov'12  2,909     2,884     +25  2,909  2,865 
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