VEGOILS-Palm oil declines as ringgit strengthens

* Forecasts of higher production weigh on market

* Prices could start falling next month - trader

* Palm may test resistance at 3,169 ringgit - technicals

(Updates with latest prices)

By Emily Chow

KUALA LUMPUR, Jan 18 (Reuters) - Malaysian palm oil futures

fell on Wednesday evening on a strengthening ringgit and

forecasts of higher production.

The ringgit, in which palm is traded, gained 0.4 percent

against the dollar to 4.4430, its highest in more than a month.

A stronger ringgit makes palm oil more expensive for holders

of foreign currencies.

Benchmark palm oil futures for April delivery on

the Bursa Malaysia Derivatives Exchange had declined 0.3 percent

to 3,150 ringgit ($709) a tonne by the end of the trading day.

Traded volumes stood at 44,012 lots of 25 tonnes each on

Wednesday evening.

The market is down primarily due to the stronger ringgit,

and also on production that had been picking up slightly, said a

trader from Kuala Lumpur.

"Production will start picking up from February-March. We

expect it to rise after the Chinese New Year in a better way,

and then we'll see a fall in prices," he said.

The Lunar New Year celebrations in China begin on Jan. 28.

Supplies have declined in recent months on low output due to

the effects of a crop-damaging El Nino weather phenomenon.

Production in Malaysia, the world's second largest producer

after Indonesia, fell 6.4 percent in December from the previous

month to a seven-month low. (MYPOMP-CPOTT)

Industry players, however, forecast a rebound in the second

and the third quarter of 2017, as the lingering drought effects

of El Nino wear off and crops recover.

Palm oil output is seen rising by 12 percent this year to

19.4 million tonnes from 17.4 million tonnes in 2016, the

Malaysian Palm Oil Board (MPOB) said at a conference in Kuala

Lumpur on Tuesday.

Palm oil may test resistance at 3,169 ringgit as it has

climbed above a wedge chart pattern, analysis by Reuters market

analyst for commodities and energy technicals Wang Tao showed.

The March soybean oil contract on the CBOT rose 0.4

percent, while the May soybean oil contract on the Dalian

Commodity Exchange was up 0.1 percent.

In other related edible oils, the May contract for Dalian

palm olein declined 0.1 percent.

Palm, soy and crude oil prices at 1049 GMT

Contract Month Last Change Low High Volume

MY PALM OIL FEB7 3247 -12.00 3230 3268 880

MY PALM OIL MAR7 3188 -13.00 3173 3210 6454

MY PALM OIL APR7 3152 -9.00 3141 3175 20693

CHINA PALM OLEIN MAY7 6312 -8.00 6284 6356 451366

CHINA SOYOIL MAY7 7020 +6.00 6974 7052 374022

CBOT SOY OIL MAR7 35.7 +0.14 35.52 35.91 7991

INDIA PALM OIL JAN7 595.00 +0.20 593.60 597.3 767

INDIA SOYOIL JAN7 733.6 -0.85 732.8 734.3 1380

NYMEX CRUDE FEB7 51.69 -0.79 51.55 52.79 32711

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 = 4.4430 ringgit)

($1 = 68.0429 Indian rupees)

($1 = 6.8360 Chinese yuan)

(Reporting by Emily Chow; Editing by Subhranshu Sahu and David

Evans)