🛢️ Palm Oil Futures Edge Higher – Oversupply Limits Gains
Palm Oil Futures Edge Higher – Oversupply Limits Gains
Malaysian palm oil prices rebounded slightly on Friday after a volatile week, but lingering concerns over rising output and inventories capped market enthusiasm.
📊 Market Situation & Price Development
The July 2025 contract on the Malaysian Derivatives Exchange (MDEX) closed Friday at 3,814 MYR/t, up 13 MYR on the day but marking the second consecutive weekly loss, down 1.7% over the week.
| Contract | Price (MYR/t) | Daily Change | Weekly Change | Trend |
|---|---|---|---|---|
| Jul 25 | 3,814 | +13 | –1.7% | ⬆️/⬇️ |
| Aug 25 | 3,827 | +7 | – | ⬆️ |
| Sep 25 | 3,837 | +4 | – | ➡️ |
🌍 Key Market Drivers
- Limited Upside Despite Rebound
Friday’s bounce was attributed to bargain buying and positive spillover from crude oil and soybean oil markets. - Inventory Expectations Pressuring Sentiment
A Reuters poll estimates that Malaysia’s palm oil inventories increased in April, driven by:
– Higher seasonal production
– Slower export demand - Peak Season Ahead
Analysts expect a strong rise in production during the second half of 2025, potentially overwhelming demand. - Government Data Release
Malaysia’s official supply and demand figures are due on May 13 and are expected to confirm stock build.
💼 Trading Strategy & Market Outlook
Palm oil remains in a narrow range with bearish undertones. Traders are cautious ahead of government data and await clarity on:
- How strongly can export demand absorb a growing supply
- Whether crude oil strength will continue to support vegetable oils broadly
Strategy:
Consider short-term trades on technical rebounds, but avoid overcommitting before MPOB confirms inventory figures.
📈 3-Day Price Forecast (Jul 25 Contract)
| Date | Expected Range (MYR/t) | Forecast |
|---|---|---|
| May 14 | 3,780–3,830 | ➡️ Neutral |
| May 15 | 3,765–3,825 | ⬇️ Soft |
| May 16 | 3,770–3,840 | ➡️ Stable |
🌦️ 14-Day Weather Outlook – Key Palm Oil Regions
| Region | Trend | Notes |
|---|---|---|
| Malaysia | 🌧️ Scattered Rain | Normal monsoon patterns, no major disruptions |
| Indonesia | 🌦️ Variable | Mixed conditions, early signs of production lift |
| India (Demand) | ☀️ Warm & dry | Favourable for the vegetable oil import flow |
| Middle East | ☀️ Hot | May lift energy-linked edible oil demand |