Updates with midday break prices, comment on paragraph 3

By Dewi Kurniawati

JAKARTA, Sept 5 (Reuters) -Malaysian palm oil futures extended losses to a fourth straight session on Thursday amid lower trading volumes and worries over poor production expectations.

The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange was down 20 ringgit, or 0.51%, at 3,866 ringgit ($892.84) a metric ton by the midday break.

"Rather thin volume today, suggesting a lethargy in selling activities. The biggest worry is the low arrival of fruit bunches and poor production performance both in August and September," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

Malaysia's palm oil inventories are expected to have climbed to their highest levels in six months at the end of August due to lacklustre export demand, a Reuters survey showed.

Dalian's most-active soyoil contract DBYcv1 fell 0.7%, while its palm oil contract DCPcv1 was down 0.68%. The Chicago Board of Trade BOcv1 gained 0.2%.

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

The Malaysian ringgit MYR=, palm's currency of trade, gained 0.46% against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders.

Indonesia, the world's biggest palm oil exporter, plans to lower export levy rates of the tropical oil to improve competitiveness against rival vegetable oils and raise farmers' income.

Malaysia's August palm oil exports are seen at 1,376,412 tons, according to Amspec Agri.

Exports of Malaysian palm oil products for August fell 9.9% to 1,445,442 tons from 1,604,578 tons shipped during July, cargo surveyor Intertek Testing Services said.

Oil prices edged up after plunging to multi-month lows previously as major producers may delay an output increase planned for next month and U.S. inventories fell, though the gains were limited by persistent demand concerns.O/R

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Palm oil may break support at 3,864 ringgit per ton, and fall into the 3,777 ringgit to 3,821 ringgit range, according to Reuters' technical analyst Wang Tao.

($1 = 4.3300 ringgit)

Reporting by Dewi Kurniawati; Editing by Eileen Soreng and Rashmi Aich

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