August 24, 2017 / 6:34 AM / 7 months ago

VEGOILS-Palm heads for 6th straight gain on expectations of subdued production growth

    * Market unsure about extent of stockpile gains - trader
    * Palm may retest resistance at 2,768 rgt/tonne - Techs

    By Emily Chow
    KUALA LUMPUR, Aug 24 (Reuters) - Malaysian palm oil futures
extended gains into a sixth session on Thursday and hovered near
a five-month high hit earlier this week on expectations that
production growth will be slower than earlier forecasts.
    The benchmark palm oil contract for November delivery
 on the Bursa Malaysia Derivatives Exchange was up 0.6
percent at 2,755 ringgit ($644.14) at the midday break after
rising as high as 2,758 ringgit. On Tuesday, it had hit a high
of 2,771 ringgit, its loftiest since March 23.
    Traded volumes stood at 14,282 lots of 25 tonnes each at
Thursday noon.
    "We are seeing small increases in production which many did
not anticipate. That is one reason why the market is holding
up," said a Kuala Lumpur-based trader, referring to the output
so far this month.
    "Whether end-stocks (in August) will rise significantly
again is another question."
    Palm oil stockpiles at the end of July rose a
forecast-beating 16.8 percent on month to 1.78 million tonnes,
the highest in more than a year, according to industry regulator
    Production in July rose 20.7 percent from a month earlier to
1.83 million tonnes, also surpassing expectations.
    However, gains in August inventory and production may not
match those of July, according to traders who had earlier
expected to see double-digit growth.
    Palm oil may retest a resistance at 2,768 ringgit per tonne
as it could have resumed its uptrend, according to Wang Tao, a
Reuters market analyst for commodities and energy technicals.

    In related vegetable oils, the October soybean oil contract
 on the Chicago Board of Trade was up 0.3 percent, while
the January soybean oil on the Dalian Commodity Exchange
 rose 0.3 percent.
    The January palm olein contract on Dalian climbed
as much as 0.7 percent.
    Palm oil prices are impacted by the movements in related
edible oils, as they compete for a share in the global vegetable
oils market. 
 Palm, soy and crude oil prices at 0602 GMT
 Contract          Month    Last  Change     Low    High  Volume
 MY PALM OIL       SEP7     2739  +16.00    2722    2739     202
 MY PALM OIL       OCT7     2748  +21.00    2721    2748     636
 MY PALM OIL       NOV7     2755  +17.00    2730    2758    9028
 CHINA PALM OLEIN  JAN8     5580  +36.00    5496    5594  563790
 CHINA SOYOIL      JAN8     6410  +16.00    6360    6424  349034
 CBOT SOY OIL      DEC7    35.17   +0.12   34.99   35.19    4163
 INDIA PALM OIL    AUG7   520.00   +4.00  518.40     521     206
 INDIA SOYOIL      SEP7    664.1   +3.25     662  664.75    5740
 NYMEX CRUDE       OCT7    48.38   -0.03   48.30   48.40   15151
 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 = 4.2770 ringgit)
($1 = 64.0450 Indian rupees)
($1 = 6.6609 Chinese yuan)

 (Reporting by Emily Chow; Editing by Subhranshu Sahu)
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