Palm Oil Eases After Rally – Production Gains Offset Export Support
Palm oil futures in Malaysia fell on Wednesday after two days of gains. Higher production and inventory forecasts weighed on prices, although stronger rival oils and export flows limited losses.
📊 Market Overview – MDEX (Malaysian Derivatives Exchange)
| Contract | Price (MYR/t) | Change (MYR) | % Change | Trend |
|---|---|---|---|---|
| Aug 25 | 3,896 | –12 | –0.31% | ⬇️ |
| Jul 25 | 3,913 | –9 | –0.23% | ⬇️ |
| Sep 25 | 3,894 | –12 | –0.31% | ⬇️ |
💱 Exchange rate reference: 1 USD = ~4.27 MYR → Approx. 913.05 USD/t for Aug 25 contract
🌍 Key Market Drivers
- Rising Output Pressures Market
MPOB sources and trade surveys anticipate a sequential rise in May production, driven by favourable weather and labour recovery. - Inventory Growth Expected
Stocks may exceed 1.9 million tons for the first time since late 2023, adding bearish pressure to near-term contracts. - Rival Oils Supportive
Soy oil and sunflower oil gains across CBOT and EU markets offered some spillover support. - Stronger Exports in May
Shipments to India and Pakistan are improving due to better refining margins and rising festival demand.
💼 Trading Strategy & Outlook
Palm oil may consolidate in a new, lower range unless rival oils drive a rebound. Inventory data and Indian import volumes are the next critical signals.
Recommendations:
– Wait for confirmation near 3,870–3,880 MYR/t before reentering long
– Monitor export shipments from key terminals
– Sellers should protect downside with short hedges near 3,910–3,930
📈 3-Day Price Forecast (Aug 25 Contract – MDEX)
| Date | Expected Range (MYR/t) | Outlook |
|---|---|---|
| May 22 | 3,880–3,910 | ➡️ Neutral |
| May 23 | 3,870–3,920 | ➡️ Sideways |
| May 24 | 3,875–3,940 | ⬆️ Rebound if exports persist |
🌱 Palm Oil – Weather Commentary
🛈 Weather does not directly affect the market short-term but underpins production trends.
- Malaysia: 🌤️ Favourable; regular rainfall supports yields
- Indonesia: 🌤️ Stable; no disruption in harvesting
- India: ☀️ Dry; supports demand for edible oil imports
Related posts:
Palm Oil Prices Rebound – Futures Post Strongest Daily Gain in Two Weeks
Palm Oil Logs Third Weekly Loss – Weakness in Soyoil and Crude Prevails
Palm Oil Prices Reverse as Soy Oil Crashes – First Weekly Gain Still Possible
Palm Oil Rises on Soyoil Rally – Weak Crude Oil Caps Upside
Palm Oil Futures Edge Higher – Oversupply Limits Gains