BANGKOK, Aug 16: Malaysian crude palm oil futures ended lower for the third straight day in a technical selloff on Wednesday, dealers said.

The benchmark third-month November crude palm oil contract on Bursa Malaysia Derivatives in Kuala Lumpur ended down 26 ringgit a ton at 1,627 ringgit ($442).

It was just a technical selloff. The market could not hold 1,645 ringgit and could not hold 1,635 ringgit, then the market broke down, a Malaysian dealer in Kuala Lumpur said.

Overall volume was 15,431 lots of 25 tons. Other traded months were down between 16 and 30 ringgit.

Demand for bio fuels from Europe and China, its traditional buyers, was buoyant as countries sought ways to cut dependence on expensive crude oil, Malaysian dealers said.

Heavy buying from companies setting up bio diesel plants before starting production was also likely to support prices for the rest of 2006, they said.

Demand is still there, one thing for sure, a dealer said. On Tuesday, Malaysian Prime Minister Abdullah Ahmad Badawi said the government had approved licences for 52 bio diesel plants with a combined capacity of more than 5m tons annually.

But, if it breaks 1,620 ringgit, that would mean the next strong support level is at 1,600 ringgit. —Reuters