VEGOILS-Palm ends higher on renewed buying interest, but hovers near 2-1/2-wk low

(Recasts, adds new trader quote)

* Palm ends higher as low prices attract buying interest

* Optimism about lower-than-expected output in Indonesia helps recovery - trader

* Weak external factors however weigh on prices

By Anuradha Raghu

KUALA LUMPUR, Feb 24 (Reuters) - Malaysian palm oil futures ended higher on Tuesday, pausing a slide from

the previous day's session as weak prices attracted buyers, although poor sentiment from external markets

capped gains and kept prices near 2-1/2 week lows.

Prices of palm on Monday reopened after the Lunar New Year break to weak U.S. soyoil markets and sluggish

export demand, which dragged the contract to its lowest level in since Feb. 5.

But buying interest trickled in as prices hovered near 2,200 ringgit levels, traders said, further helped

by a weak currency that makes the ringgit-priced feedstock cheaper for overseas buyers.

"Traders are of the opinion that prices are poised for some recovery with the weaker ringgit providing

better margins and improving demand," said a trader with a local commodities brokerage in Malaysia.

The benchmark May contract on the Bursa Malaysia Derivatives Exchange gained 0.8 percent to

close at 2,257 ringgit ($620) per tonne on Tuesday, reversing some losses earlier in the session.

Traded volume stood at 49,188 lots of 25 tonnes each, above the usual 35,000 lots.

The Malaysian ringgit fell to 3.6400 against the U.S. dollar on Tuesday.

Traders have turned optimistic about lower-than-expected crude palm oil production in world's top producer

Indonesia, the Malaysia-based trader said, which may help halt a buildup in stockpiles for now.

Market talk is that Indonesian palm output in January fell between 7-11 percent from December, versus

trade estimates for a 5 percent drop, the trader said.

However, weak sentiment in comparative soy and crude markets exerted pressure on palm oil, the world's

most traded vegetable oil, as it struggles with a poor technical outlook.

"Technically, palm looks weak. External factors are not good, you've got weak closings for soyoil and

crude," said another trader with a foreign commodities brokerage in Malaysia.

Brent crude oil fell towards $58 a barrel on Tuesday ahead of key industry data expected to show

further builds in U.S. inventories due to heavy over-supply. U.S. crude was down 50 cents at $48.95.

The U.S. soyoil contract for May pulled up 0.4 percent in late Asian trading, but prices were still

pressured by worries over plentiful domestic stocks of the oilseed in the 2015-16 marketing year, which comes

at a time when bumper soy harvests are anticipated from South America.

China's markets are still on a break for Lunar New Year and will reopen on Feb. 25.

Palm, soy and crude oil prices at 1028 GMT

Contract Month Last Change Low High Volume

MY PALM OIL MAR5 2275 +28.00 2230 2275 972

MY PALM OIL APR5 2260 +18.00 2222 2263 6548

MY PALM OIL MAY5 2257 +18.00 2216 2259 24434

CHINA PALM OLEIN MAY5 0 +0.00 0 0 0

CHINA SOYOIL MAY5 0 +0.00 0 0 0

CBOT SOY OIL MAY5 31.44 -2.60 31.06 31.45 13586

INDIA PALM OIL FEB5 453.50 -2.60 450.00 455.30 799

INDIA SOYOIL APR5 596.80 +6.00 590.00 596.80 30515

NYMEX CRUDE APR5 49.03 -0.42 48.68 49.66 29627

Palm oil prices in Malaysian ringgit per tonne

CBOT soy oil in U.S. cents per pound

Dalian soy oil and RBD palm olein in Chinese yuan per tonne

India soy oil in Indian rupee per 10 kg

Crude in U.S. dollars per barrel

($1 = 3.6400 Malaysian ringgit)

($1 = 6.2551 Chinese yuan)

($1 = 62.31 Indian rupee)

(Editing by Joseph Radford and Biju Dwarakanath)