KUALA LUMPUR, Jan 19: Malaysian crude palm oil futures slipped 1.6 per cent on Friday as the weather in the country's flood-hit south improved and prices of rival soyaoil declined.

The benchmark third-month April contract on the Bursa Malaysia Derivatives exchange finished down 1.6 per cent, or 30 ringgit, at 1,875 ringgit ($536) a ton after trading between 1,873 ringgit and 1,890 ringgit.

Soyabeans are down and the weather is looking good, said one dealer. It is nice and sunny, and water levels have also gone down.

Other traded contracts closed lower between 11 and 31 ringgit . Overall volume stood at 14,034 lots of 25 tons. Malaysia's palm oil market has been volatile in the past month as heavy rain and flooding hit supplies from the key producing southern Johor state.

There is a lot of liquidation going on in the market, as people expect production to improve now, said another trader.

Flooding has already cut Malaysian crude palm oil output by 26.3 per cent to 1.14 million tonnes in December from a month earlier, according to the state-run Malaysian Palm Oil Board. Soyabean futures at the Chicago Board of Trade slid late Thursday as the speculative selling in soyabean oil spilled over to soybeans, traders said.

March soybeans closed 5-cents lower at $7.16- per bushel. The back months ended 5 cents weaker to up 1 cent.

Palm oil often track soyabean market because both are used in products ranging from food and cosmetics to biodiesel.

In the physical crude palm oil market, January shipments inthe southern region were quoted at 1,920/1,930 ringgit a ton.

—Reuters