KUALA LUMPUR, Dec 6 - Weather continued to be good for both cropdevelopment and harvesting for the second consecutive month in November.Excessive rains in some areas, particularly in the East Coast region ofPeninsular Malaysia and some parts in East Malaysia had impactedharvesting and oil extraction rates slightly.Overall CPO production in November turned out as expected at an estimated1.035 million tonnes. This is 105,000 tonnes or 9.3 percent lower thanOctober. On an annual basis production was down 11.2 percent or moresevere than the contraction of 3.6 percent in October. For the 11 monthsto November, production amounted to 10.825 million tonnes. This is 17,000tonnes less than output for the whole of last year. With one more month togo total production this year might just reach 11.68 million tonnes. Thiswould be 840,000 tonnes or 7.7 percent more than last year.Palm oil offtake is estimated at 1.1 million tonnes in November. This is15,000 tonnes up on our previous estimate and nearly 60,000 tommes morethan a month earlier. Exports alone are estimated to have increased 45,000to 945,000 tonnes. This is also nearly 50,000 tonnes more than a yearearlier. During the month some traders had high expectations that exportswould reach a million tonnes as reported by wireservices.These traders had pinned their hopes on robust offtake by Pakistan andIndia. They unrealistically expected Pakistan to take at least 200,000tonnes palm oil but the actual figure was around 160,000 tonnes comprisingsome 130,000 tonnes from Malaysia and an estimated 30,000 tonnes fromIndonesia. Stocks of palm oil dropped 40,000 tonnes to an estimated 1.3million tonnes at end-November. This is little changed from our previousestimate. Compared to the all-time record high level registered a yearearlier stocks were down a hefty 225,000 tonnes.During the week beginning November 19, CPO futures trended upward on fourconsecutive days on concerted speculative buying that forced shortists tocover when stops were hit. However, the week's gains of 85 ringgit (basisFebruary) were fully erased the following week on long liquidation profittaking arising from increasing likelihood palm oil exports for Novemberwould not come close to a million tonnes coupled with sluggish new exportsales.Notwithstanding the steady to firm undertone in South America SBO cashmarket, CBT soya complex provided hardly any lead for the vegetable oilsmarket until the last day of the month. The palm oil market reactedquickly on Monday with futures setting the pace on renewed speculativebuying linked to perceptions that a demand-led bull run would soon be onthe way. In two days CPO futures chalked up gains of up to 88 ringgit withthe February contract hitting an intraday high of 1,185 ringgit or sixringgit short of last month's high posted on November 23. The upwardmomentum fizzled out yesterday on lack of follow through in the cashmarket.World palm oil fundementals for November-December have hardly changed inrecent weeks. But looking beyond end-December into March/April next yearthe fundementals for palm oil and other major edible oils willincreasingly favour producers-exporters. The risk-reward ratio alsofavours traders with long positions and consumers who extend their forwardcoverage. China holds the trump card as to whether CPO futures would testthis year's high of 1,315 ringgit recorded on August 8. Our final Novemberestimates will be released on December 11 ahead of the MPOB Report. Thefinal report for this year is scheduled on Friday ahead of the longEid-Fitr holidays. MDEX will be closed for three days Monday-Wednesday,December 17-19.(The opinions expressed in this article represent the views of the authoronly. They should not be seen as necessarily reflecting the views ofReuters)