• Bloomberg quoted the Malaysian Palm Oil Council as saying that CPO production in Malaysia would increase from 17.3mil tonnes in 2016 to 19.4mil tonnes in 2017F. CPO production normally peaks in August or September. However this year, the peak may be delayed to October due to higher-thanexpected rainfall. CPO production in Indonesia is estimated to rise from 32.2mil tonnes in 2016 to 34.9mil tonnes in 2017F. The biodiesel industry may require 3.6mil tonnes of palm oil in 2017F.

• Bloomberg also reported that freight prices in Brazil rose by more than 60% between late June and early August on some routes used to transport grains from Center-West to South and Southeast ports. An industry expert said that the higher freight charges and unfavourable exchange rate may limit Brazil's competitiveness to export corn, which is expected to be a record crop this year.

• According to Reuters, farmers in Brazil are running out of storage as bumper crops pile up. In Mato Grosso, the massive harvest limited permanent storage options as part of the record soybean output sit in silos while producers wait for prices to rebound. The farmers' reluctance to sell has eroded margins for ADM and Bunge Ltd as grain traders had to pay more than expected for their supplies. Brazil's stockpiles are expected to be worsened by the corn crop, which is estimated to reach 66.6mil tonnes this year.

• The Star said that Malaysia has reiterated its commitment to sustainable palm oil practices to overcome various challenges in the global market including the EU Parliament's resolution on palm oil and deforestation. The government has mandated for the MSPO (Malaysian Sustainable Palm Oil) certification in Malaysia by December 2019.

• According to Biofuels News, the USA produced 136mil gallons of biodiesel in May 2017. This was 9mil gallons higher than April 2017. About 66mil gallons of the biodiesel were sold by producers as B100. The biodiesel production came from 97 biodiesel plants with a combined capacity of 2.3bil gallons per year. The Midwest region was the heart of the US biodiesel industry, accounting for 69% of the country's total production.

• SGS and Intertek said that Malaysia's palm oil shipments fell by 15.3% and 14.7% in the first 20 days of August vs. the same period in July. According to SGS, China's palm oil imports slid by 28.6% while palm exports to the EU eased by 44.5%. On a positive note, palm exports to India rose by 10.7%. Intertek said that RBD palm olein accounted for 39.9% of Malaysia's palm oil shipments in the first 20 days of August while crude palm oil made up another 13.2%.

Source: AmInvest Research - 28 Aug 2017