December 26, 2017 / 5:09 AM / 3 months ago

VEGOILS-Palm oil climbs on expectations of strong export demand, weak production

    * Palm heads for 2nd session of gains in thin-volume trading
    * January, February production seen declining, says trader
    * Malaysia palm exports for Dec 1-25 rise 1 pct m/m - ITS

    By Emily Chow
    KUALA LUMPUR, Dec 26 (Reuters) - Malaysian palm oil futures
rose in early trade on Tuesday, heading for a second consecutive
session of gains, on expectations of stronger export demand and
weaker production.
    The benchmark palm oil contract for March delivery
on the Bursa Malaysia Derivatives Exchange was up 0.7 percent at
2,468 ringgit ($605.35) a tonne at the midday break. It has
declined 5.2 percent so far this month after November's 7.5
percent drop.
    Trading volumes, however, were thin at 7,374 lots of 25
tonnes each at the midday break.
    "The market is looking at export figures, positive figures
will see some recovery," said a Kuala Lumpur-based trader,
referring to Malaysian palm oil shipment data from cargo
surveyors Intertek Testing Services (ITS) and Societe Generale
de Surveillance (SGS).
    "The market has been beaten down badly, so some positive
news can bring it up as all bad news may have been priced in.
January and February production, for example, will be lower."
    Exports of Malaysian palm oil products for Dec. 1-25 rose 1
percent from a month earlier, data released by ITS before the
midday break on Tuesday showed.
    Demand for the tropical oil is expected to improve in the
coming weeks, as key buyer China stocks up ahead of the Lunar
New Year holidays in February. Palm oil is used for cooking
purposes during major festivities.
    Production, however, is seen declining until the first
quarter of next year in line with seasonal trend. MYPOMP-CPOTT
    In other related edible oils, the May soybean oil contract
on the Dalian Commodity Exchange was up 0.2 percent,
while the Dalian January palm olein contract was flat.  
    The March soybean oil contract on the Chicago Board
of Trade was closed for the Christmas holidays.
    Palm oil prices are impacted by movements in other edible
oils, as they compete for a share of the global vegetable oils

    Palm, soy and crude oil prices as of 0445 GMT
 Contract          Month    Last  Change     Low    High  Volume
 MY PALM OIL       JAN8     2408   +1.00    2397    2410     238
 MY PALM OIL       FEB8     2440  +10.00    2425    2442     909
 MY PALM OIL       MAR8     2468  +17.00    2451    2469    4014
 CHINA PALM OLEIN  MAY8     5162   +0.00    5156    5190  117834
 CHINA SOYOIL      MAY8     5658  +10.00    5652    5680  109296
 CBOT SOY OIL      MAR8    32.94   +0.00       0       0       0
 INDIA PALM OIL    DEC7   551.00   +1.30  550.30     551       8
 INDIA SOYOIL      JAN8   717.85   -0.50  717.85  717.85      10
 NYMEX CRUDE       FEB8    58.52   +0.05   58.37   58.65   14032
  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 = 4.0770 ringgit)
($1 = 64.0300 Indian rupees)
($1 = 6.5510 Chinese yuan)

 (Reporting by Emily Chow; Editing by Subhranshu Sahu)
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