KUALA LUMPUR: Malaysian palm oil futures ticked down Thursday, declining for the third time in four sessions, weighed down by forecast of a jump in June 1-20 production.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange slid 21 ringgit, or 0.61%, to 3,424 ringgit ($823.47) a tonne.

The higher-than-expected production estimates from the Malaysian Palm Oil Association (MPOA) and weakness in Chicago soyaoil futures is weighing on palm, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

MPOA forecast crude palm oil production during June 1-20 rose 15% from the month before, traders said on Wednesday.

“The lack of fresh destination demand is also weighing on the palm oil prices,” Bagani said.

Palm oil prices have declined about 24% since peaking at a record high in mid-May.

The contract may see some recovery after this sharp correction, but we believe the peak cycle is over with the current prices already factoring in the tight vegetable oil supply over the next 6-8 months, analysts at UOB KayHian said in a note.

The vegetable oil market may be supported by stronger-than-expected biodiesel demand from the recovery in crude oil prices, economies reopening or higher mandate from producing countries, they added.

Palm prices will stay in the range of 3,500-3,800 ringgit a tonne in the next three months as production is expected to rise only marginally while exports pick up, the Malaysian Palm Oil Council (MPOC) said.

Dalian’s most-active soyaoil contract fell 0.5%, while its palm oil contract declined 1.7%. Soyaoil prices on the Chicago Board of Trade were down 1.6%.

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