* Palm prices hit a low at 2,726 ringgit, lowest since Feb. 26 * Some traders expect demand to pick up ahead of April * Prices could hit 3,000 ringgit in April if El Nino returns -Mistry (Updates closing prices, adds comments) By Michael Taylor JAKARTA, March 21 (Reuters) - Malaysian palm oil futures fell to a three-week low on Friday, tracking weakness in competing edible oil markets, while downbeat export data and improving weather conditions also weighed on prices. By the close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had dropped 1.5 percent to 2,731 ringgit ($830) per tonne. Prices have fallen 2.3 percent this week, but have gained 2.7 percent this year. "People are looking at the export figures, this month's production - the weather is improving," said a trader with a foreign commodities brokerage in Malaysia. "There has also been a big drop in soybean oil." Total traded volume for palm oil stood at 39,171 lots of 25 tonnes, just above the average 35,000 lots. Exports of Malaysian palm oil products fell 12.3 percent from a month ago to 767,785 tonnes during March 1-20 as India, the world's top edible oil buyer, reduced imports of palm, cargo surveyor Intertek Testing Services said on Thursday. Another cargo surveyor Societe Generale de Surveillance showed exports for the same period fell 12.0 percent. Benchmark palm oil prices could, however, rise to 3,000 ringgit in April if the El Nino weather pattern returns to curb yields from trees, which have already been stressed by dry weather, leading analyst Dorab Mistry said. Malaysian palm oil refiners are cutting production with some plants running at half their capacity as the prolonged dryness in the Southeast Asian country has reduced feedstock availability, trade sources said. Palm prices soared to an 18-month high at 2,916 ringgit on March 11 amid worries dry weather may hit supplies, but prices have come off peaks and have now ended negative in eight sessions out of nine, as rains over most parts of Malaysia last week ended the crop-damaging dry spell. "Stocks are low in Malaysian and Indonesia," said an Indonesia-based palm trader. "The problems are not only in stocks, but the fact that prices have been on the high side. "Production will increase from March to May and will reduce (supply) tightness (and) then the next story will be El-Nino -- which would effect production in the first and second quarters of 2015." Palm prices were also pressured by losses in competing overseas soyoil markets. The U.S. soyoil contract for May fell 1.2 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange shed 1 percent. Some traders see palm oil demand picking up in the next 10 days, ahead of expected export tax rises for April and as buyers re-stock before the Muslim festival of Eid al-Fitr. In other markets, Brent crude rose towards $107 per barrel as fresh U.S. sanctions against Russia, the world's second-largest oil exporter, increased fears of a disruption to supplies. Palm, soy and crude oil prices at 1013 GMT Contract Month Last Change Low High Volume MY PALM OIL APR4 2822 -43.00 2821 2849 373 MY PALM OIL MAY4 2761 -48.00 2760 2804 6523 MY PALM OIL JUN4 2731 -42.00 2726 2769 20886 CHINA PALM OLEIN SEP4 6140 -44.00 6112 6204 576008 CHINA SOYOIL SEP4 6828 -70.00 6804 6896 802624 CBOT SOY OIL MAY4 40.84 -0.47 40.77 41.39 8094 NYMEX CRUDE MAY4 99.06 +0.16 98.25 99.18 12182 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 Crude in U.S. dollars per barrel ($1 = 3.2965 Malaysian ringgit) ($1 = 6.2275 Chinese yuan)

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