November 6, 2017 / 5:51 AM / a year ago

VEGOILS-Palm falls to two-week low on rising output, inventory f'cast

    * Market falls to 2,782 rgt/T, weakest since Oct 25
    * Weaker rival oils weighing on palm - Trader
    * Palm may drop to 2,779 rgt/T - Technicals

    By Emily Chow
    KUALA LUMPUR, Nov 6 (Reuters) - Malaysian palm oil futures
slid in early trade on Monday, in line for a third consecutive
day of losses, as sentiment turned bearish over expectations of
rising production and end-stock levels.
    The benchmark palm oil contract for January delivery
 on the Bursa Malaysia Derivatives Exchange fell 0.8
percent to 2,783 ringgit ($656.52) a tonne at the midday break.
It earlier fell to a low of 2,782 ringgit, its weakest levels
since Oct. 25.
    Traded volumes stood at 11,414 lots of 25 tonnes each at
noon on Monday.
    Malaysian palm oil output is seen rising to a two-year peak
in October, lifting inventories to their highest since January
2016, boosted by holiday season demand and a higher number of
working days, according to a Reuters poll. 
    "Production and end-stocks are seen rising, followed by weak
externals seen in both Dalian and soyoil," said a futures trader
from Kuala Lumpur, referring to weakness in soyoil on the
Chicago Board of Trade and China's Dalian Commodity Exchange. 
    "The only concern is the weather, which may turn this bear
around," he said, referring to the year end monsoon rains which
could disrupt the harvesting process in the short term.
    October production in Malaysia is seen rising 9.4 percent
from September to 1.95 million tonnes, while end-stocks are
pegged at 2.2 million tonnes, up 9.6 percent on-month, showed
the Reuters poll.
    Exports in October are likely to gain 2.3 percent to 1.55
million tonnes. 
    In other related edible oils, the December soybean oil
contract on the Chicago Board of Trade was down 0.1
percent, while the January soybean oil contract on the Dalian
Commodity Exchange fell 0.6 percent. 
    The January palm olein contract on Dalian was down
1.1 percent.
    Prices of palm oil are impacted by movements in related
oils, as they compete for a share in the global vegetable oils
    Palm oil may drop to 2,779 ringgit per tonne, as it has
broken a support at 2,808 ringgit, according to Wang Tao, a
Reuters market analyst for commodities and energy technicals.

    Palm, soy and crude oil prices at 0535 GMT
 Contract          Month    Last  Change     Low    High  Volume
 MY PALM OIL       NOV7     2764  -20.00    2764    2765       2
 MY PALM OIL       DEC7     2769  -20.00    2768    2776     392
 MY PALM OIL       JAN8     2783  -23.00    2782    2795    5457
 CHINA PALM OLEIN  JAN8     5600  -54.00    5582    5678  252892
 CHINA SOYOIL      JAN8     6080  -30.00    6060    6134  254642
 CBOT SOY OIL      DEC7    34.41   -0.01   34.32   34.48    2897
 INDIA PALM OIL    NOV7   556.10   +1.90  551.00   556.6     298
 INDIA SOYOIL      NOV7      696   +0.45   692.5     696    4470
 NYMEX CRUDE       DEC7    55.77   +0.13   55.68   56.00   32029
 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 = 4.2390 ringgit)
($1 = 64.7300 Indian rupees)
($1 = 6.6340 Chinese yuan)

 (Reporting by Emily Chow; Editing by Vyas Mohan)
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