KUALA LUMPUR: Malaysian palm oil futures ended 1% lower on Thursday after rising for four days, though expectations for lower inventories and weak output limited losses.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended down 53 ringgit, or 1.05%, at 4,983 ringgit ($1,183.33) a tonne.

“The market is undergoing technical correction after a recent rally turned it overbought,” a Kuala Lumpur-based broker said, adding weakness in other commodity markets also helped set off the correction.

The Southern Peninsula Palm Oil Millers’ Association estimated production during Jan. 1-5 fell 45.8% from the same period in December, traders said.

Output in the world’s second largest producer has been impacted by heavy rains and severe flooding in several states in recent weeks.

The U.S. Department of Agriculture trimmed its 2021/22 crude palm oil production forecast for Malaysia to 18 million tonnes from 18.2 million tonnes due to the adverse weather from super typhoon Rai and labour shortages.

Exports are forecast to recover slightly to 16.3 million metric tonnes, though the improvement will continue to be restrained by production limitation and how quickly Malaysia is able to resolve the labour issue, the agency said in a report.

Dalian’s most-active soyoil contract fell 1.2%, while its palm oil contract slipped 0.9%. Soyoil prices on the Chicago Board of Trade were down 1.1%.

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