The Edge Markets (12/12/2017) - KUALA LUMPUR (Dec 12): Malaysian palm oil futures snapped a losing streak to rise for the first time in seven sessions, as traders short-covered the market and official data showed declines in November's production.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 0.6% at 2,473 ringgit (US$606.57) a tonne on Tuesday evening.

Palm had shed 5.5% in the previous six sessions, hitting a five-and-a-half month low of 2,455 ringgit on Monday evening.

Trading volumes stood at 47,419 lots of 25 tonnes each at the end of the trading day.

"The market is seeing some short-covering now, bearish views have already been priced in," said a futures trader from Kuala Lumpur, referring to earlier expectations of rising stockpiles at end-November and falling demand. 

Data released during the midday break showed that Malaysia's palm oil stocks at end-November rose 16% from a month earlier to a two-year high of 2.56 million tonnes.

The sharp rise in inventories comes on the back of weaker-than-forecast exports. Shipments fell 11.9% to 1.35 million tonnes, while production declined 3.3% to 1.94 million tonnes.   

Another trader added that the market viewed the drop in production as supportive as "it suggests peak output has passed".

Palm oil production typically peaks in the third quarter of the year, before tapering off at year-end and into the first quarter of the following year.

In other related oils, the January soybean oil contract on the Chicago Board of Trade was slightly down 0.03%, while the January soybean oil contract on the Dalian Commodity Exchange rose 0.5%.

The Dalian January palm olein contract dipped 0.03%.

Palm oil prices are affected by other edible oils, as they compete for a share in the global vegetable oils market.

 Palm, soy and crude oil prices at 1112 GMT

Contract                     Month      Last      Change      Low      High      Volume

MY PALM OIL              DEC7      2365       +15.00      2362      2395       105

MY PALM OIL              JAN8       2426       +15.00      2421      2457       1695

MY PALM OIL              FEB8       2471       +14.00      2462      2495       16303

CHINA PALM OLEIN   MAY8       5328       +0.00        5302     5368        353650

CHINA SOYOIL           MAY8       5914      +40.00      5874      5936        295804

CBOT SOY OIL           JAN8        33.45      +0.00       33.38     33.63       7610

INDIA PALM OIL         DEC7      563.50     +1.80       561.80    567          616

INDIA SOYOIL            DEC7       718.5      +2.35        716        718.5       2540

NYMEX CRUDE         JAN8        58.30      +0.31        57.90     58.56       131544

 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 = 4.0770 ringgit)

(US$1 = 64.4025 Indian rupees)

(US$1 = 6.6172 Chinese yuan)