Malaysian palm oil futures fell to their lowest in nearly three months on Thursday evening, weighed down by expectations of rising output and tracking weaker performing rival oils. Benchmark palm oil futures for May delivery on the Bursa Malaysia Derivatives Exchange were down 1.3 percent to 2,929 ringgit ($658.05) a tonne at the end of the trading day. They earlier hit an intraday low of 2,925 ringgit, the weakest since Nov. 22.
Traded volumes stood at 70,395 lots of 25 tonnes each in the evening. Traders said the market dipped on expectations of rising February output. "Overseas markets also weakened," said a futures trader from Kuala Lumpur, referring to rival edible oils on the Chicago Board of Trade and China's Dalian Commodity Exchange.
Palm oil prices have been trading at over four-year highs on tight market supplies, as the lingering effects of a crop damaging El Nino and monsoon floods lowered output in January.
Production declined 13.4 percent for the full month of January, its sharpest drop in a year, according to data from industry regulator the Malaysian Palm Oil Board.
Output, however, is seen rebounding in February, in line with the seasonal trend and as the El Nino's dry weather effects wear off.
Palm oil may retest a support at 2,959 ringgit per tonne, a break below which could open the way towards the next support at 2,879 ringgit, according to analysis by Wang Tao, a Reuters market analyst for commodities and energy technicals.
In other related edible oils, the March soyabean oil contract on the Chicago Board of Trade fell 0.5 percent, while the May soyabean oil contract on the Dalian Commodity Exchange was down 0.6 percent.
The May contract for Dalian palm olein also declined 1 percent.
Palm oil prices are influenced by the movements of related oils, as they compete for a share in the global vegetable oils market.