KUALA LUMPUR: Malaysian palm oil futures steadied on Wednesday after snapping their longest winning streak since June 2002 a day earlier, as traders weighed forecasts of an improvement in production against robust exports outlook.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange had hit its lowest since March 10 earlier in the session.

The market had declined slightly in early trade, as the Southern Peninsula Palm Oil Millers' Association forecast a large increase in March 1-15 production in Malaysia while Indonesia's output is also expected to rise, a Kuala Lumpur-based trader said.

Malaysia's exports to India have been robust this month and may keep March stocks unchanged, the trader added.

Malaysia, the world's second-largest palm exporter, kept its April export tax for crude palm oil at 8% but raised its reference price to 4,331.48 ringgit a tonne, a circular on the Malaysian Palm Oil Board website showed.

Palm oil exports from Indonesia, the world's top producer, rose nearly 20% on an annual basis in January, the country's biggest palm group said, but output was disrupted by flood and stocks fell to a six-month low.

Dalian's most-active soyoil contract fell 2%, while its palm oil contract declined 2.8%. Soyoil prices on the Chicago Board of Trade were down 0.4%.

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

"Agricultural prices have rallied since the middle of last year and this has sparked talk of a super cycle, but we anticipate that this latest rally will prove temporary," Samuel Burman, an assistant commodities economist at Capital Economics, said in a note.

Agricultural prices will fall in both the short- and long-term as demand growth wanes and supply holds up with high prices and the return of migrant labour boosting production, he added.