The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.6 percent at 2,127 ringgit ($523.38) a tonne by the midday break.
However, for the month as well as the quarter, palm oil has gained 0.3 percent so far.
"The market is reacting to prospects of higher production today," said a Kuala Lumpur-based futures trader, adding that he expected a single-digit gain in March in line with the seasonal trend.
Gains in production would add to current stockpiles, which unexpectedly rose 1.3 percent to 3.05 million tonnes last month, according to industry regulator the Malaysian Palm Oil Board.
Production however fell 11.1 percent to 1.54 million tonnes in February. In March 2018, Malaysian palm oil production rose 17.2 percent to 1.57 million tonnes. <MYPOMP-CPOTT>
Palm oil may fall to 2,110 ringgit per tonne as it has cleared a support at 2,155 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In other related oils, the Chicago May soybean oil contract fell 0.2 percent, while the May soyoil contract on the Dalian Commodity Exchange dipped 0.2 percent.
The Dalian May palm oil contract, however, was up 0.1 percent.
Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.