The Edge Markets (19/10/2017) - KUALA LUMPUR (Oct 19): Malaysian palm oil futures continued to fall on Thursday evening in its second consecutive session, tracking weakness on China's Dalian Commodity Exchange and on estimates of rising palm oil production.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 0.7% at 2,723 ringgit (US$644.95) a tonne by the end of the session, to its lowest since Oct 13. Traded volumes stood at 48,701 lots of 25 tonnes each.

Palm prices are impacted by movements of related oils, as they compete for a share in the global vegetable oils market.

The January soybean oil contract on the Dalian Commodity Exchange dropped 1.5%, while the January palm olein contract declined 1.3%.

"The market sentiment has been dampened by a sharp drop in China's market, amid record soybean stocks," said a futures trader from Kuala Lumpur.

China's stocks of soybean oil are at record levels, after huge imports of beans this year, with 93.5 million tonnes arriving in the 2016/17 crop year that ended in September.

"It looks like the palm market is concerned with production going higher this month," said another futures trader from Kuala Lumpur.

Exports of palm oil products during Oct 1-15 rose 10.3% to 690,074 tonnes, from 625,655 tonnes shipped a month earlier, cargo surveyor Intertek Testing Services said on Monday.

Also, production in October is seen rising from a month earlier, due to the higher number of working days.

However, this rise is normally seasonal. "Production usually peaks in September or October and then in November and December, production starts to drop," a trader said.

Meanwhile, leading edible oils analyst Dorab Mistry said on Wednesday that crude palm oil prices were forecast to rise to US$800 per tonne CIF Rotterdam by January, with potential to hit US$850 by March 2018.

Palm could drop to 2,721 ringgit per tonne, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.

In other related edible oils, the December soybean oil contract on the Chicago Board of Trade gained as 0.15%.    
    

Contract                      Month      Last    Change      Low       High       Volume
MY PALM OIL            NOV7      2720    -20.00      2700       2732          772
MY PALM OIL            DEC7      2719    -20.00      2698       2736         6100
MY PALM OIL              JAN8      2722    -18.00      2704       2744        19528
CHINA PALM OLEIN  JAN8      5486    -74.00       5484       5592       433016
CHINA SOYOIL           JAN8      5974    -92.00       5966       6080       363018
CBOT SOY OIL            DEC7     33.46     +0.05      33.28      33.66        12104
INDIA PALM OIL        OCT7      0.00     +0.00        0.00           0             0
INDIA SOYOIL            NOV7         0     +0.00           0              0             0
NYMEX CRUDE         NOV7     51.46     -0.58       51.17      52.17        15624
 
 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
 
(US$1 = 4.2220 ringgit)
(US$1 = 65.0000 Indian rupees)
(US$1 = 6.6179 Chinese yuan renminbi)