KUALA LUMPUR, July 29: Late short covering helped support Malaysia’s crude palm oil market on Monday, but prices stayed in negative territory due to weakness in the Chicago Board of Trade (CBOT) soy futures, traders said.

At the close, the benchmark third-month futures, October, was 10 ringgit lower at 1,447 ringgit ($380.79) a ton after trading as low as 1,435 ringgit.

Volume was heavy at 2,575 lots.

In Alliance/CBOT/Eurex (A/E/C) trading, front August soyabean futures was nine cents lower to $5.41-> per bushel.

There was late covering on the physical side, which is mainly due to anticipation that India will be buying more oils, said one dealer.

Some dealers said India’s weekend palm oil buying had raised hope of more purchases by the world’s largest edible oil consumer from August onwards as erratic monsoon rains hit local oilseeds crops.

India bought up to 40,000 tons of crude palm oil and crude olein Friday through Sunday, and some dealers said the country’s palm oil imports from Malaysia and Indonesia may reach 350,000 tons in August, up from 200,000 tons in July.

Some analysts in India said a drop in agriculture output could lead to a significant rise in imports of edible oils. Patchy rainfall in many parts of India during the monsoon season has raised fears of the worst drought in more than a decade.

Our July exports may be unchanged, but I am expecting the number to pick up in August, said one dealer, adding that India bought CPO at $400-$405 a ton C&F last weekend.

The Indore soy futures in India ended limit-up on Friday, which suggested that people are worried about the weather. India is going to buy a lot of oils next month, he said.

Cargo surveyor SGS put Malaysia’s June palm oil exports at 897,811 tons, down from 970,846 tons in May. SGS is due to release the exports data for July on Wednesday.

Some dealers said India could be buying an additional 600,000-800,000 tons of edible oils in the next few months.

At the physical market, July and August CPO contracts saw bids at 1,455 ringgit a tonne in the southern as well as as central regions against sale offers at 1,460 ringgit.

Trade was reported at 1,450 to 1,455 ringgit for July/August (south) and at 1,445 to 1,450 for central (July/August).—Reuters