The palm oil market is navigating a complex scenario marked by price weakness, volatile oilseed markets, and lingering effects of global trade tensions. Latest data from the Malaysian Derivatives Exchange (MDEX) underscores a second consecutive day of lower palm oil futures, driven primarily by spread adjustments against Chicago soyoil and bearish sentiment spilling over from the broader oilseed complex. This comes amid a backdrop of continued geopolitical uncertainty—particularly regarding US-China trade tariffs—which is clouding prospects for US soybeans, a crucial competitor in the global vegetable oil arena.
The slow Brazilian soybean harvest, concerns over yields in South America, and shifting patterns in global oilseed exports are further compounding an already cautious outlook for palm oil participants. Meanwhile, soft US soybean export inspections and anticipation of possible retaliatory measures from major importers amplify the uncertainty in global oilseed demand, which invariably impacts palm oil trading dynamics. The overall mood in the palm oil market is one of guarded caution, with traders closely watching the next moves in both export policy and rival oilseed performance to determine near-term price direction.
📈 Prices
| Contract | Previous (MYR/t) | Close (MYR/t) | Change (MYR) | Change (%) |
|---|---|---|---|---|
| Mar 26 | 4051.00 | 4075.00 | +24.00 | +0.59% |
| Apr 26 | 4081.00 | 4107.00 | +26.00 | +0.63% |
| May 26 | 4083.00 | 4114.00 | +31.00 | +0.75% |
| Jun 26 | 4082.00 | 4112.00 | +30.00 | +0.73% |
| Jul 26 | 4074.00 | 4105.00 | +31.00 | +0.76% |
| Aug 26 | 4073.00 | 4097.00 | +24.00 | +0.59% |
| Sep 26 | 4071.00 | 4100.00 | +29.00 | +0.71% |
| Oct 26 | 4069.00 | 4097.00 | +28.00 | +0.68% |
Note: Subsequent contract months show marginally negative changes, reflecting the recent slide and weaker sentiment for late 2027–2028 contracts.
🌍 Supply & Demand Dynamics
- Trade Tensions: The US Supreme Court’s overturning of existing tariffs and the escalation of new tariffs by the US has left market participants unsure of the future of agricultural trade, particularly with China potentially reducing purchases of US soybeans in favor of Brazilian supply.
- Competitor Oilseeds: Weakness in US soybean exports (down 45% week-on-week) and slow Brazilian harvest progress act as dual forces: supporting edible oil prices short term, but increasing uncertainty as alternative oilseed availability fluctuates.
- Comparative Pricing: Recent spread adjustments against Chicago soyoil have pressured Malaysian palm oil prices further, indicating heightened sensitivity to moves in rival vegetable oils.
📊 Fundamentals & Market Drivers
- MDEX Sentiment: Two consecutive days of lower closes, reflecting corrective action in spreads vs. soyoil and bearish sentiment in oilseed markets.
- Export Data: USDA reports US soybean exports at 669,865 tonnes for the week ending February 19, well below both prior week and prior year, reinforcing uncertainty in aggregate global oilseed flow.
- South America Oilseed Harvest: Brazil’s 2025/26 harvest is lagging (30% complete vs. 39% prior year), with Rio Grande do Sul still vulnerable to weather-driven crop losses.
- Rapeseed/Canola Complex: Strength in Canadian canola (ICE Winnipeg) and Euronext rapeseed, driven by hopes for US trade policy benefits, could indirectly support the palm oil complex if spillover sentiment turns bullish.
🌦️ Weather Outlook & Impact
- Brazil: Continued delays in the soybean harvest, especially in Rio Grande do Sul, due to late planting and erratic rainfall, risking further yield losses. Additional rain could limit losses but uncertain forecasts keep the supply outlook fragile.
- Malaysia & Indonesia: No significant short-term weather disruptions reported, though ongoing El Niño/La Niña watch remains important for long-term yield prospects.
🌏 Global Production & Stocks
| Country | 2025/26 Output (est., mil t) | Stock Situation |
|---|---|---|
| Malaysia | ~19.5 | Steady; subject to weather |
| Indonesia | ~47.0 | Stable; export policy in focus |
| Brazil (Soy) | ~155.0 | Harvest delays, yield risk |
| US (Soy) | ~115.0 | Inventories likely to rise on export weakness |
Note: Soybean data included for cross-market context; palm oil production and stocks in SE Asia remain the global pricing anchor.
🔎 Trading Outlook & Recommendations
- Near-term palm oil market bias remains cautiously bearish due to weak spreads against soyoil, sluggish demand signals, and external macro pressures.
- Watch for possible technical support at recent contract lows in MDEX futures; a break below could expose further downside.
- Monitor US-China policy developments and Brazil’s harvest pace for market-moving headlines.
- Rapeseed/canola strength may offer occasional support, but palm oil will track closely with soyoil until fresh demand emerges.
- Physical buyers may find opportunities for short-covering if futures dip towards key support zones.
📆 3-Day Regional Price Forecast (MDEX)
| Date | Forecast MDEX Close (MYR/t) | Market Sentiment |
|---|---|---|
| Day 1 | 4080–4090 | Soft/Sideways to Lower |
| Day 2 | 4070–4085 | Bearish Bias |
| Day 3 | 4060–4080 | Further Weakness Risk if Soy Complex Stays Soft |
Related posts:
Palm Oil Futures Slip Amid Supply Worries and Tepid Export Demand
Palm Oil Market in Focus: Price Pressure Mounts Amid Global Oilseed Shifts
Palm Oil Markets Dip as MDEX Contracts Retreat: Key Drivers and Outlook
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Sunflower Market Outlook: SAFEX Prices Rise Amid Global Oilseed Volatility
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Palm Oil Market: Stocks Drop as Malaysian Output Hits 10-Month Low, Prices under Pressure