Palm Oil Futures Edge Higher on MDEX as Forward Curve Flattens

Palm oil futures on the Malaysian Derivatives Exchange (MDEX) firmed slightly on April 28, 2026, with a modestly upward‑sloping curve into early 2027 and thin liquidity further out to 2028–29. The market signals a steady, mildly bullish near‑term tone rather than an aggressive rally.

MDEX palm oil contracts from May 2026 to early 2027 gained between 0.18% and 0.44% on the day, with most active months trading in a narrow band around 4,500 MYR/t. Turnover was concentrated in nearby contracts, while very long‑dated positions beyond 2027 remained illiquid and largely unchanged. The structure reflects stable demand expectations and manageable supply, with limited conviction on long‑term price risks. Short‑term weather developments and competing vegetable oil markets remain the key catalysts that could shift this currently balanced picture.

📈 Prices & Market Structure

On April 28, 2026, the MDEX palm oil curve showed small daily gains and a mild contango from nearby to early 2027:

Contract	Close (MYR/t)	Change (MYR)	Change (%)	Approx. Price (EUR/t)
May 2026	4,481	+16	+0.36%	≈ 1,045 EUR/t
Jun 2026	4,513	+8	+0.18%	≈ 1,050 EUR/t
Jul 2026	4,545	+11	+0.24%	≈ 1,058 EUR/t
Sep 2026	4,585	+9	+0.20%	≈ 1,068 EUR/t
Jan 2027	4,587	+17	+0.37%	≈ 1,068 EUR/t

(EUR estimates assume roughly 4.3 MYR/EUR and are indicative only.)

The curve edges down slightly again from mid‑2027 onward, with thin volume and some contracts last traded on April 27 at around 4,427 MYR/t, suggesting limited forward hedging activity beyond a 1–2 year horizon.

🌍 Supply & Demand Balance

The modest contango and tight price range around 4,500 MYR/t point to a broadly balanced physical market. Nearby firmness reflects ongoing baseline demand from food, oleochemicals and biodiesel blends in key importing regions, while the absence of sharper backwardation implies no acute short‑term supply squeeze is being priced in.

At the same time, the lack of strong price acceleration into late 2026 and early 2027 indicates that traders currently view future production growth in Southeast Asia as adequate to meet projected demand. Market participants appear cautious about over‑pricing long‑dated supply risks, keeping liquidity and open interest concentrated in the front and mid‑curve.

📊 Market Fundamentals & Curve Signals

Daily gains of 0.18–0.44% across the active 2026–27 strip signal a constructive but not overheated sentiment. The small, steady upticks suggest a market responding to incremental supportive inputs—such as firm export interest or slightly stronger competing oil prices—rather than to any sudden fundamental shock.

Thin trading and unchanged levels in the far‑dated 2028–29 contracts, clustered around 4,427 MYR/t, underline how uncertain long‑run demand, policy and acreage trends are. For now, the forward curve’s gentle rise toward late 2026–early 2027, followed by a flat to slightly softer tail, is consistent with expectations of stable stocks and moderate growth in output.

⛅ Weather & External Drivers

In the very near term, weather in Malaysia and Indonesia remains the key risk factor for yields and fruit quality, and any shift toward more extreme dryness or excessive rainfall could quickly tighten the nearby portion of the curve. Export policy changes or biodiesel mandate adjustments in producing countries also remain important upside or downside risks for prices.

In addition, relative movements in competing vegetable oils (soybean oil, sunflower oil, rapeseed oil) and crude oil benchmarks will shape demand for palm oil in food and fuel uses. A stronger energy complex typically supports biodiesel demand and, with it, palm oil values, while weaker energy or macro concerns could cap further price gains.

📆 Trading Outlook

• Producers: Use the current mild contango around 4,500–4,600 MYR/t (≈1,045–1,080 EUR/t) in late‑2026/early‑2027 contracts to layer in incremental forward hedges, while keeping some upside open in case of weather‑driven rallies.
• Industrial buyers: Consider securing a portion of Q3–Q4 2026 needs at today’s levels, as the upward‑sloping curve signals slightly higher forward pricing but no strong incentive to delay coverage.
• Traders: The relatively flat nearby spreads and low far‑dated liquidity favour short‑dated directional strategies and spread trading around fundamental or weather‑related headlines rather than deep‑curve positional bets.

📉 3‑Day Directional View (EUR Basis)

• MDEX nearby (May–Jul 2026): Slightly firmer bias, with prices likely to oscillate around 1,040–1,070 EUR/t equivalent in the next three trading days, barring major weather or policy surprises.
• Late 2026–early 2027 strip: Stable to mildly supportive tone, with limited fresh information expected to significantly move the relatively illiquid back months in the very short run.