KUALA LUMPUR, Aug 5: Malaysian palm oil futures ended down on Monday after factoring in lower US soyaoil prices and higher crop estimates for July from key market analyst Ivan Wong.

News that monsoon rains were returning to India to revive its soyabean crop ater a severe drought also capped hopes for a strong growth in palm oil exports to that country, local dealers said.

The benchmark third-month October contract shed 41 ringgit to end the day at 1,452 ringgit ($382) a ton, on a heavy volume of 4,181 lots.

Dealers put the October contract’s range at 1,435-1,450 ringgit for the week.

It’s a downside view because the factors at hand aren’t too encouraging, said a dealer.

The market had opened softer on the back of Friday’s weak soyaoil prices on the Chicago Board of Trade.

Soyaoil is palm oil’s main competitor and their prices often move in step with one another.

Soyaoil futures on the CBOT were dragged down by fund sales on Friday, after hefty gains earlier in the week.

The key August contract was down 0.01 cent at 20.30 per lb, although December ended 0.04 cent up at 20.67 cents.

Already down at midday on Monday, the palm oil market took a further hit when Wong said in late trading that he expected a two per cent rise in production to 965,000 tons for July — against the market’s hopes of a flat rate of growth.

Wong gave a lower stock estimate for end-July — 905,000 tons against 910,000-920,000 previously — and a higher export projection of 860,000 tons, against 850,000-855,000 previously.

But the market was more concerned about his higher production estimates.

A two per cent rise in production is bearish when the market was hoping for a zero per cent rise, said a dealer.

On the export front, dealers said the strong demand for palm oil seen lately from India may taper with the return of rains to drought-ravaged areas in that country.

According to shipment estimates, India bought 97,830 tons of palm oil from Malaysia in July. Local exporters had been expecting to sell as much as 180,000 tons to that country in August if the drought situation there had persisted.

India produces over five million tons each of groundnut and soyabean in the winter season each year, sown mainly in the western Gujarat, central Madhya Pradesh and southern Andhra Pradesh states.

Irregularities in monsoon rains had wrecked havoc for weeks on crops in these areas, local growers had said.

But on Monday, an official with the India Metereological Department said southwest monsoon rains have revived after a weak phase in several regions reeling from drought.

In physical crude palm oil, the August/September CPO contracts saw bids at 1,460 ringgit a tonne against offers at 1,465 ringgit.—Reuters