KUALA LUMPUR: Malaysian palm oil futures retreated from early gains on Thursday on estimates of a sharp drop in July exports as investors await upcoming supply and demand data.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed down 3 ringgit, or 0.12%, at 2,404 ringgit ($564.32) a tonne, after rising as much as 1% during the session.

Palm had risen 2% to close at a two-week high in the previous session.

The Malaysian Palm Oil Board's industry performance data is due on Friday, with a Reuters poll showing Malaysia's palm oil inventories in June likely fell about 5% from May as demand recovered after an easing of coronavirus curbs.

"Demand was good in June and that helped reduce end-stocks. Going into July, we are not expecting similar demand," a Kuala Lumpur-based trader said, adding that the market is bracing for higher inventories in the coming months.

Malaysia's palm oil exports in the July 1-10 period will likely fall around 15% from the previous month, according to traders.

Meanwhile, Indonesia, the world's top palm oil maker, exported 2.43 million tonnes of the vegetable oil in May, including refined products, falling from 2.79 million tonnes a year earlier, the Indonesian Palm Oil Association said on Thursday.

Indonesia also consumed 4.16 million kilolitres of unblended biodiesel between January and June, which was 43.3% of its full-year target, Andriah Feby Misna, the director of bioenergy at the country's energy ministry, told Reuters.

Dalian's most-active soyoil contract rose 0.83%, while its palm oil contract gained 0.79%. Soyoil prices on the Chicago Board of Trade fell 0.24%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.