The palm oil market has faced a week of notable price softness, with major contracts on the Malaysian Derivatives Exchange (MDEX) trending lower as bearish momentum persists. Recent sessions saw chronic weakness, as closing prices for front months like March 2026 settled at MYR 3,932/t (down 0.76%), echoing declines across the strip. Spillover pressure from softer energy markets, tepid export demand from China and India, and improving production figures have contributed to a distinctly negative tone. The latest supply estimates and weather patterns in Indonesia and Malaysia—where most global palm oil is grown—have been favorable for yields, further dampening bullish sentiment. Meanwhile, macroeconomic headwinds and concerns about biofuel demand in the EU are curbing upward price movement. In this climate, both physical and speculative traders are recalibrating their expectations, as the path to recovery hinges on a combination of demand-side surprises and adverse weather events. In this report, we analyze the most up-to-date price action, review supply and demand fundamentals, survey recent weather outlooks, and present actionable trading recommendations for market participants.
📈 Prices: Latest MDEX Palm Oil Futures
| Contract | Closing Price (MYR/t) | Change (MYR) | Change (%) | Sentiment |
|---|---|---|---|---|
| Jan 26 | 3,919 | -28 | -0.71% | Bearish |
| Feb 26 | 3,928 | -30 | -0.76% | Bearish |
| Mar 26 | 3,932 | -30 | -0.76% | Bearish |
| Apr 26 | 3,936 | -34 | -0.86% | Bearish |
| May 26 | 3,934 | -37 | -0.94% | Bearish |
| Jun 26 | 3,926 | -37 | -0.94% | Bearish |
| Jul 26 | 3,915 | -37 | -0.95% | Bearish |
| Aug 26 | 3,910 | -32 | -0.82% | Bearish |
| Sep 26 | 3,904 | -29 | -0.74% | Bearish |
| Oct 26 | 3,921 | -7 | -0.18% | Steady |
🌍 Supply & Demand Drivers
- Production: Recent MPOB data suggests Malaysian output improved in the last month as favorable rains supported palm development; Indonesia also reports solid yields.
- Exports: Sluggish demand from China and India, the two largest importers, remains a drag, with official export figures showing a month-on-month decline.
- Inventory: Inventories in both Malaysia and Indonesia are trending upward; as of last release, Malaysian stocks exceeded 2.2 million tons—well above the seasonal average.
- Policy: No major changes reported in export tax regimes or biofuel mandates, but EU legislative scrutiny of imported deforestation may overhang Q1 2026 demand.
- Spec positioning: Managed money remains net short, reflecting bearish sentiment; recent CFTC-style reports on Asian commodities point to subdued speculative interest.
📊 Fundamentals Snapshot
| Country | 2024 Production (Mt) | 2024 Stocks (Mt) | 2024 Exports (Mt) |
|---|---|---|---|
| Indonesia | 49.0 | 3.7 | 28.5 |
| Malaysia | 19.2 | 2.2 | 16.4 |
| India (import) | — | 2.1 | 10.8 |
| China (import) | — | 1.6 | 6.8 |
Note: Numbers are millions of metric tons (Mt).
⛅ Weather Outlook for Key Growing Regions
- Indonesia & Malaysia: Current weather remains largely favorable, with scattered showers replenishing soil moisture. This boosts near-term yield prospects; no major La Niña/El Niño risks are evident through the three-day outlook.
- India (importer): Seasonal weather steady, supporting logistics/distribution but not directly impacting production.
📉 Global Production & Stock Comparison
- Top producers (Indonesia and Malaysia) collectively account for over 85% of global palm oil, with current stocks robust and production matching/exceeding last year’s pace.
- Major importers (India, China, EU) remain well-supplied with stocks at comfortable levels.
📆 Trading Outlook & Recommendations
- Persistent softness likely through next week barring surprise export recovery or weather disruption.
- Physical buyers may wait for further downside before covering Q2-3 requirements.
- Speculators should limit long positions. Any rebounds are likely to be short-lived without clear demand catalysts.
- Watch for volatility tied to monthly MPOB data and Chinese/Indian import figures.
- Monitor EU regulatory news; any surprise on biofuel policy could impact prices abruptly.
🔮 3-Day Regional Price Forecast (MDEX)
| Date | Front Month Price (MYR/t) | Sentiment |
|---|---|---|
| Day 1 | 3,920 – 3,940 | Weak/Bearish |
| Day 2 | 3,910 – 3,935 | Weak/Bearish |
| Day 3 | 3,900 – 3,935 | Cautious Bearish |
Recommendation: Monitor export market data; downside risk persists without new demand impetus.
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