The Edge Markets (25/10/2018) - KUALA LUMPUR (Oct 25): Malaysian palm oil futures fell over 1% on Thursday to their lowest level in two weeks, tracking weakness in related edible oils and on forecasts of rising production.

Weaker crude oil prices also weighed on the market. Crude oil prices fell by around 1%, coming under pressure from sharp sell-offs in global stock markets, with U.S. stocks posting the biggest daily decline since 2011 to wipe out the year's gains.

Palm oil is used as feedstock to make biodiesel, and is less price competitive when crude oil prices are low.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 1% at 2,179 ringgit (US$522.79) a tonne at the end of the trading day, a third straight session of declines.

Earlier in the session, it hit its lowest level since Oct 11 at 2,166 ringgit.

Trading volumes stood at 30,038 lots of 25 tonnes each at the close of trade.

Earlier falls in soyoil prices on the U.S. Chicago Board of Trade and China's Dalian Commodity Exchange weighed on palm, said a Kuala Lumpur-based trader.

 "Our production figures are still rising, it's not good for prices. All in, we're burdened by a massive bearish outlook," he said.

"Once our current robust production ends, prices will stabilise, but for now they are retesting 2,000 ringgit levels."

Malaysian palm oil production is seen rising towards the year-end, in line with seasonal trend, before tapering off early next year.

Palm oil inventories in September rose to their highest in eight months, as production levels came in higher than exports.

In other related oils, the Chicago December soybean oil contract was slightly up 0.03%, while the January soybean oil contract on the Dalian Commodity Exchange fell as much as 0.9%.

Meanwhile, the Dalian January palm oil contract dropped 1.3%.

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

Palm oil may fall to 2,175 ringgit, as it has broken a support at 2,199 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

Palm, soy and crude oil prices at 1055 GMT

Contract                    Month   Last  Change   Low   High   Volume

 MY PALM OIL            NOV8   2071  -32.00    2068    2099     641

 MY PALM OIL            DEC8    2129  -24.00    2120    2137    4765

 MY PALM OIL            JAN9    2179  -21.00    2166    2186   13499

 CHINA PALM OLEIN  JAN9    4664  -60.00    4646    4724  317012

 CHINA SOYOIL         JAN9     5670  -50.00    5654    5722  306240

 CBOT SOY OIL         DEC8    28.63   +0.02   28.53   28.65    3865

 INDIA PALM OIL       OCT8   580.00   -3.40  579.00     587     504

 INDIA SOYOIL         NOV8     756.7    -1.55    755.6   758.65   10510

 NYMEX CRUDE      DEC8     66.76   -0.06   65.99    66.98  122301

 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 = 4.1680 ringgit)

(US$1 = 6.9452 Chinese yuan)

(US$1 = 73.2275 Indian rupees)