Palm Oil Eases After Rally – Production Gains Offset Export Support
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)
💱 Exchange rate reference: 1 USD = ~4.27 MYR → Approx. 913.05 USD/t for Aug 25 contract🌍 Key Market Drivers
- Rising Output Pressures MarketMPOB sources and trade surveys anticipate a sequential rise in May production, driven by favourable weather and labour recovery.
- Inventory Growth ExpectedStocks may exceed 1.9 million tons for the first time since late 2023, adding bearish pressure to near-term contracts.
- Rival Oils SupportiveSoy oil and sunflower oil gains across CBOT and EU markets offered some spillover support.
- Stronger Exports in MayShipments 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)
🌱 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