* Higher output prospects offset by hopes demand will rise

* Malaysian April 1-20 palm output up 17 pct - growers' estimates

of strong crude palm production in the world's second-largest

grower, although hopes for firm export demand provided some

support.

The Malaysian Palm Oil Association, a group of growers,

forecast that output rose 17 percent from April 1-20 compared

with the same period a month before. In March, Malaysian output

surged 33.3 percent to 1.49 million tonnes, the biggest ever

month-on-month rise.

The growers' forecast reflects the tropical plant's seasonal

output cycle, with supplies normally rising between April and

June, traders say.

"Moving into April onwards, everyone knows the production

will pick up. The inclination for prices to go down is there,"

said a trader with a foreign commodities brokerage in Kuala

Lumpur.

"But we also saw some buying interest in April. We are

waiting for the 25-days exports to get more leads on where

prices need to go." Cargo surveyor Intertek Testing Services

will release data on Malaysia's April 1-25 exports on Saturday.

The benchmark July contract on the Bursa Malaysia

Derivatives exchange closed at 2,159 ringgit ($596) a tonne on

Thursday, slightly lower from 2,160 ringgit in the previous

session. Prices were choppy between 2,136 and 2,164 ringgit.

Total traded volume stood at 42,451 lots of 25 tonnes, above

the usual 35,000 lots.

Technicals show that palm oil may retest support at 2,145

ringgit per tonne, as indicated by a rising wedge and a

Fibonacci retracement analysis, Reuters market analyst Wang Tao

said.

Elsewhere, industry analysts say farmers in China could

slash the amount of land they use to grow soybeans by as much as

15 percent in 2015/16 due to uncertainty over how a new subsidy

scheme will work.

A sixth straight drop in acreage could boost edible oil

imports by China, the world's biggest soybean buyer, and a major

customer for palm oil.

The U.S. July soyoil contract rose 0.5 percent in

late Asian trade, while the most active September soybean oil

contract on the Dalian Commodity Exchange gained 0.2

percent.

Oil prices steadied on Thursday as news of another steep

rise in U.S. crude inventories countered concerns over the

security of Middle East supplies due to an escalating conflict

in Yemen.

Palm, soy and crude oil prices at 1017 GMT

Contract Month Last Change Low High Volume

MY PALM OIL MAY5 2175 -4.00 2161 2176 681

MY PALM OIL JUN5 2169 -1.00 2148 2175 3147

MY PALM OIL JUL5 2159 -1.00 2136 2164 25045

CHINA PALM OLEIN SEP5 4880 -18.00 4872 4926 956542

CHINA SOYOIL SEP5 5674 +12.00 5632 5718 1031080

CBOT SOY OIL JUL5 31.89 -0.60 31.73 32.00 8660

INDIA PALM OIL APR5 439.00 -0.60 437.20 440.00 509

INDIA SOYOIL JUN5 588.50 +3.90 583.80 588.60 33440

NYMEX CRUDE JUN5 55.91 -0.26 55.76 56.58 29184

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 = 3.6250 Malaysian ringgit)

($1 = 6.1980 Chinese yuan)

($1 = 63.21 Indian rupees)