KUALA LUMPUR, Aug 20: Malaysian crude palm oil futures ended lower on Monday at a seven-week low as declining prices of rival soyabean oil and brisk short-selling weighed down the market after it rebounded in morning trade.

But prices were supported by global stock markets, which regained further ground after the US Federal Reserve cut a key interest rate on Friday.

The benchmark November contract on the Bursa Malaysia Derivatives Exchange fell 12 ringgit, or 0.5 per cent, to 2,366 ringgit ($679) per ton, the lowest since June 28.

Many market players are of the opinion that prices are still too high despite the strong export demand and this has resulted in some short selling to get more attractive prices, said one trader.

Chicago Board of Trade’s soybean oil has moved lower as well, pulling down the palm market a little. The December contract fell 23 ringgit while other immediate and distant months were slightly up. Overall volume climbed to 15,023 lots of 25 tonnes each from around 12,000 lots that change hands on a routine trading day.

Palm oil is still up 24.5 per cent this year, despite plummeting 6 per cent last week as credit fears battered regional bourses and began seeping into commodity markets.

The recovery in the regional markets has given some supportto palm oil but it remains to be seen if this support will follow through in the next few days, said another trader.

Investors boosted stocks and moved cautiously back into other riskier assets on Monday as immediate fears of a credit crunch waned following the US Federal Reserve’s confidence-building move last week.

European stocks shot up 1.4 per cent after a 2.3 per cent gainon Friday while Asia equities soared, with Japan’s Nikkei average recording its biggest one-day gain for 13 months.—Reuters