KUALA LUMPUR (March 06 2004): Malaysian crude palm oil (CPO) futures closed lower on Friday after an overnight drop in rival Chicago soy oil forced liquidation on contracts that saw fresh five-year highs a day earlier.

Latest crop estimates from private forecaster Ivan Wong also kept a lid on prices.

Wong estimated Malaysia’s palm oil stocks at the end of February at 1.025 million tonnes, slightly higher than his earlier projection of 1.005-1.015 million.

Stocks stood at 1.074 million tonnes at end-January.

The benchmark third-month futures on the Malaysia Derivatives Exchange, May, ended down seven ringgit at 1,986 ringgit ($522.63), off an intra day low of 1,965.

The contract briefly traded above 2,000 ringgit on Thursday, the first time since January 1999.

Other traded contracts fell between four and 10 ringgit.

Overall volume shrank to 3,242 lots from Thursday’s 5,256.

"There are also very few factors to trade on, besides that worry over exports you have to contend with," said a trader.

Players are concerned about how palm oil exports may shape up in March as output from the local crop picks up again after a seasonal decline. Exports were up in January, after a drop since October.

But estimates by cargo surveyors on Monday showed another decline for February.

In the physical market, March CPO contract saw closing bids/offers at 2,005/2,010 ringgit a tonne for both the southern and central regions. Trade was reported at 2,000-2,010 ringgit.

The News International, Pakistan