Malaysian palm oil futures last traded lower on Wednesday, weighed down by slowing demand and a lower-than-expected drop in inventories.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange last traded down 22 ringgit, or 0.8%, to 2,881 ringgit ($690.89).

Earlier in the session, the market touched its highest since February 2017 at 2,930 ringgit a tonne.

"Malaysian palm oil futures is trading lower on not-so-bullish Malaysian Palm Oil Board (MPOB) report and weak Dec. 1-10 export data," said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.

MPOB data released on Tuesday showed Malaysia's palm oil inventories fell to a three-month low in November as a seasonal decline in production curbed yields, while exports dropped on slowing purchases by top importers.

However, the decline was lower than expected. Stockpiles slid to 2.26 million tonnes, down 4.1% from the previous month.

This compared with a Reuters survey forecasting reserves to drop 5.7% to 2.22 million tonnes.

Exports of Malaysian palm oil products for Dec. 1-10 fell 11.4% to 376,659 tonnes from 425,010 tonnes shipped during Nov. 1-10, cargo surveyor Societe Generale de Surveillance said on Tuesday.

The decline in palm oil prices is also attributed to the weakness in related vegetable oil futures at the Dalian Commodities Exchange and the Chicago Board of Trade, Anilkumar said.

Dalian's most-active soyaoil contract traded 0.8% lower, while its palm oil contract fell 1.2%. Soyoil prices on the Chicago Board of Trade were also trading down at 0.3%.

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

Palm oil may rise to 2,969 ringgit, as it has more or less broken a resistance at 2,911 ringgit per tonne, Reuters technical analyst Wang Tao said.