The palm oil market currently stands at a critical crossroads, challenged by weak demand, fluctuating rival oilseed prices, and mixed fundamental signals from global trade flows. Despite some attempt at price stability in European rapeseed and the continued resilience in local demand due to tightening EU imports, palm oil faces downward market pressure, exacerbated by ongoing global oilseed competition and shifting trade dynamics. Recent contract prices on the Malaysian Derivatives Exchange (MDEX) reflect moderate declines, pointing to persistent market uncertainty through early 2026.
At the same time, significant attention is drawn to global oilseeds’ turbulence—especially soybeans and canola—where US export flows falter, China’s purchases remain tepid, and Canadian canola markets hit multimonth lows. This downward spiral among vegetable oils is intensifying price competition for palm oil. Climatic conditions in key growing regions will influence both output and the market’s near-term price trajectory, especially as seasonal monsoon patterns set in. This report dissects prevailing price actions, supply-demand developments, production forecasts, trading tactics, and near-term outlooks, helping market participants and observers navigate the complexity of today’s palm oil landscape.
📈 Prices: MDEX Palm Oil Futures Snapshot
| Contract | Prev. Close (MYR/t) | Close (MYR/t) | Change | % Change | Date | Volume | Sentiment |
|---|---|---|---|---|---|---|---|
| Dec 25 | 4055.00 | 4031.00 | -24.00 | -0.60% | 09.12.2025 | 54 | Bearish |
| Jan 26 | 4085.00 | 4080.00 | -5.00 | -0.12% | 10.12.2025 | 993 | Weak |
| Feb 26 | 4106.00 | 4102.00 | -4.00 | -0.10% | 10.12.2025 | 5185 | Stable |
| Mar 26 | 4123.00 | 4118.00 | -5.00 | -0.12% | 10.12.2025 | 1578 | Neutral |
| Apr 26 | 4128.00 | 4119.00 | -9.00 | -0.22% | 10.12.2025 | 699 | Bearish |
| May 26 | 4124.00 | 4117.00 | -7.00 | -0.17% | 10.12.2025 | 2043 | Bearish |
Source: MDEX. Prices in Malaysian ringgit (MYR) per tonne.
🌍 Supply & Demand: Key Market Drivers
- Vegetable Oil Competition: Palm oil faces stiff price pressure from a weak canola market in Canada (ICE futures at an 8-month low) and slack soybean demand (CBoT soybean futures at a six-week low).
- EU & China Trade Dynamics: Reduced EU imports tilt EU crushers to local supply. China remains on the sidelines due to continued high import duties and unresolved trade conflicts with Canada.
- US Soybean Flows: Soybean export shipments out of the US lag well behind last year (-45.2% YoY), and China’s buying remains below official targets, limiting bullish catalysts for all edible oils.
- USDA WASDE Outlook: Analysts expect upward revisions to global and US soybean ending stocks, likely maintaining downside bias for competitors and palm oil alike.
- Speculative Positioning: Open interest and volumes in palm futures remain moderate; sentiment is cautious amid macroeconomic uncertainty and subdued demand.
📊 Fundamentals & Global Comparison
| Country/Region | Palm Oil Production (2024E, Mt) | Ending Stocks (2024E, Mt) |
|---|---|---|
| Indonesia | 48.5 | 3.7 |
| Malaysia | 19.2 | 1.8 |
| EU | 2.7 | 0.3 |
| India | 0.31 | 0.2 |
| China | 0.46 | 0.21 |
| Others (Rest of World) | 8.9 | 0.7 |
Mt = million tonnes. Source: USDA, Oil World, Trade estimates.
⛅ Weather Outlook: Major Growing Regions
- Southeast Asia (Malaysia/Indonesia): The onset of the monsoon season is increasing rainfall, improving soil moisture. Some concerns linger over flooding in low-lying plantations, though overall growing conditions are currently favorable for palm yields.
- Outlook: If weather remains favorable, palm oil output in Q1 2026 should remain steady or rise slightly after a seasonal slowdown at year-end. Significant weather disruptions are not currently forecast.
📆 Trading Outlook & Recommendations
- Palm oil prices remain under downside pressure from weak rival oilseed markets and slack global demand.
- Supply risks exist if unusual adverse weather hits SE Asia, but near-term conditions are benign.
- Hedgers in palm-consuming regions should consider gradual coverage for Q1–Q2 2026 at current price levels.
- Speculative traders may find value in buying short-term dips, but should keep stops tight amid volatile cross-commodity pressures.
- Monitor US/China soybean trade news and monthly USDA/WASDE data for next market-moving cues.
🔮 3-Day Regional Price Forecast (MDEX, MYR/t)
| Date | Forecast Price (MYR/t) | Sentiment |
|---|---|---|
| 11-Dec-2025 | 4080–4110 | Sideways/Bearish |
| 12-Dec-2025 | 4065–4100 | Bearish |
| 13-Dec-2025 | 4050–4090 | Bearish |
Key watchpoints: US–China oilseed trade, weather updates, EU/India import demand signals.
Related posts:
Soybean Markets Sink to Multi-Week Lows: Exports Falter, Weather Risks Loom
Palm Oil Futures Face Pressure as Stocks Swell and Production Peaks
Palm Oil Market Update: Prices Rise on Tight Supplies; Watch Malaysian Weather Ahead
Palm Oil Market Slides Amid Weaker Demand and Softer Weather Outlook
Palm Oil Market Analysis: Prices Stagnate as Global Supplies Rise & Monsoon Weather Settles Yields