* Prices also hit by weak exports - trader

(Updates latest prices)

07/04/2016 (Reuters) - Malaysian palm oil futures dropped to their lowest level in nearly two weeks on Wednesday, hit by better-than-expected output forecasts and weak export demand.

The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange lost 1.2 percent, falling to 2,722 ringgit ($695) per tonne at the end of the trading day.

Earlier in the session the contract hit 2,708 ringgit, its lowest since March 25. Traded volumes were 48,993 lots of 25 tonnes each, above a 2015 daily average of 44,600 lots.

"Some expect better production in April, and exports are not promising," said a trader based in East Malaysia, adding that the market expects March output to grow 8-10 percent month-on-month.

A Reuters poll had forecast March output to rise 8 percent from a month ago, in line with seasonal trends, ahead of official data scheduled for release on Monday. But production is seen coming in at its weakest for the month since 2007 due to a crop-damaging El Nino.

Industry experts have forecast El Nino's dry weather effects would reduce global output by 2-3 million tonnes, pushing prices up to 3,000 ringgit per tonne by June.

Technical charts show palm oil is facing resistance at 2,776 ringgit, according to Reuters analyst Wang Tao.

But, palm oil shipments are expected to take a hit in April after Malaysia raised its crude palm oil export duty to 5 percent from zero, its first hike in nearly a year.

In competing vegetable oil markets, the May Chicago Board of Trade soyoil contract dropped 0.3 percent, while the September soybean oil contract on the Dalian Commodity Exchange lost 1.5 percent.

The offer price for crude palm kernel oil fell to 5125.73 ringgit per tonne (PKO-MYSTH-M1) on Wednesday evening, according to price assessments by Thomson Reuters.

Palm, soy and crude oil prices at 1045 GMT:

Contract Month Last Change Low High Volume

MY PALM OIL APR6 2692 -36.00 2680 2695 301

MY PALM OIL MAY6 2708 -36.00 2696 2719 3095

MY PALM OIL JUN6 2724 -34.00 2708 2736 24237

CHINA PALM OLEIN SEP6 5518 -72.00 5504 5584 1023360

CHINA SOYOIL SEP6 6058 -94.00 6044 6152 740424

CBOT SOY OIL MAY6 33.81 +2.90 33.8 34.02 9208

INDIA PALM OIL APR6 558.30 +2.90 548.00 559.7 1979

INDIA SOYOIL APR6 652.75 +3.30 647.9 654 10260

NYMEX CRUDE MAY6 36.94 +1.05 36.43 37.15 94154

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel

($1 = 3.9140 ringgit)
($1 = 66.6700 Indian rupees)
($1 = 6.4851 Chinese yuan)