KUALA LUMPUR: Malaysian palm oil futures fell for a second straight session on Tuesday, weighed down by expectations of higher May stockpiles and output, and fears of an export levy cut in Indonesia.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed down 88 ringgit, or 2.13%, at 4,041 ringgit ($962.86) a tonne. Earlier in the day, it fell as much as 5%. Malaysian markets were closed on Monday for a holiday.

Palm oil tracked weakness in Dalian palm olein amid market talks of an impending levy reduction in Indonesia, a Kuala Lumpur-based trader said.

Indonesia, the world's biggest palm exporter, is discussing a review of its high crude palm oil export levies, but authorities told Reuters on Friday that no decision had been made yet.

Traders said the Malaysian Palm Oil Association (MPOA) estimated May production of crude palm oil could rise 7% from the month before to 1.62 million tonnes.

The estimate is in line with a Reuters survey that also pegged end-May stockpiles rising 6.3% month-on-month to an eight-month high.

Traders now await the Malaysian Palm Oil Board to release its May supply and demand data on Thursday.

Dalian's most-active soyoil contract fell 3.5%, while its palm oil contract declined 4.5%. Soyoil prices on the Chicago Board of Trade were up 1%.

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

Palm oil will trend up for a second consecutive week, towards resistance levels at 4,260-4,280 ringgit a tonne this week, with support levels at 3,870-3,890 ringgit, Refinitiv Agriculture Research analysts said in a note on Monday.

The bullish momentum is fuelled by gains in soybean oil futures due to supply worries, and bullish sentiment in the broader commodities market that has seen crude oil rising above $70 per barrel, Refinitiv said.