KUALA LUMPUR: Malaysian palm oil futures reversed early losses on Tuesday to scale to their highest closing in a month, as traders assessed slow exports against forecasts of a steep drop in supply ahead of key data.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 42 ringgit, or 1.12%, to 3,804 ringgit ($857.72) a tonne, extending a four-session winning streak.

Palm earlier fell as much as 2.45%.

“Market is pricing in a possible dip in end-April stocks and the weather vagaries that comes along with the emergence of El Niño,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

The Malaysian Palm Oil Board (MPOB) is scheduled to release data for April supply and demand on Wednesday, with surveys indicating slowing exports amid a steep drop in inventories and production.

Many are bracing for bullish sentiment, leading to the short covering seen this week, Paramalingam said.

In related oils, Dalian’s most-active soyoil contract fell 1.2%, while its palm oil contract lost 0.1%. Soyoil prices on the Chicago Board of Trade were up 0.4%.

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