KUALA LUMPUR, Aug 4: Malaysian crude palm oil futures closed lower on Friday, dragged down by lower prices of rival soyaoil and profit-taking.

But traders said lower palm oil prices could trigger fresh buying as fundamentals remained strong with stocks coming down because of strong exports.

There is not much scope of downside, there is potential for fresh buying at these levels, one trader said.

The benchmark third-month October contract on the Bursa Malaysia Derivatives ended down 30 ringgit, or nearly two per cent, at 1,611 ringgit ($439) a ton.

Other contracts fell between 18 and 31 ringgit a ton. Overall volumes stood at 15,949 lots of 25 tons each. Traders said they saw support at 1,600 ringgit for the October contract.

Traders were awaiting July export and production numbers due to be announced by the state-run Malaysian Palm Oil Board on Aug. 10.

Societe Generale de Surveillance, a cargo surveyor closely watched by the market, said this week exports of Malaysian palm products in July rose 11.8 per cent from a month earlier.

Palm oil output in Malaysia is estimated to fall 2.1 per cent to 1.3 million tons in July, a Reuters poll last week showed.

Traders said dry weather in peninsular Malaysia had hit production.

Soyabean futures on the Chicago Board of Trade closed 5 to 6 cents per bushel lower on Thursday, after Midwest rains this week helped calm worries about the US soyabean crop, traders said.

August soya closed 5 cents weaker at $5.76 per bushel. New-crop November soya settled 5 down at $5.95-1/2.

August soyaoil settled 0.27 cent per lb lower at 26.55 cents, with the back months down 0.19 to 0.32.

Soyaoil and palm oil are both used in products ranging from food and soap to cosmetics and biodiesel, so prices for the two commodities often to move in tandem.

In the physical market, crude palm oil for August shipment saw sellers at 1,605 ringgit a ton and bids at 1,590. Trades were done at around 1,600 ringgit a ton.—Reuters