Palm Oil Futures Edge Higher – Oversupply Limits Gains
🛢️ Palm Oil Futures Edge Higher – Oversupply Limits Gains
Palm Oil Futures Edge Higher – Oversupply Limits GainsMalaysian palm oil prices rebounded slightly on Friday after a volatile week, but lingering concerns over rising output and inventories capped market enthusiasm.
📊 Market Situation & Price Development
The July 2025 contract on the Malaysian Derivatives Exchange (MDEX) closed Friday at 3,814 MYR/t, up 13 MYR on the day but marking the second consecutive weekly loss, down 1.7% over the week.🌍 Key Market Drivers
- Limited Upside Despite ReboundFriday’s bounce was attributed to bargain buying and positive spillover from crude oil and soybean oil markets.
- Inventory Expectations Pressuring SentimentA Reuters poll estimates that Malaysia's palm oil inventories increased in April, driven by:– Higher seasonal production– Slower export demand
- Peak Season AheadAnalysts expect a strong rise in production during the second half of 2025, potentially overwhelming demand.
- Government Data ReleaseMalaysia’s official supply and demand figures are due on May 13 and are expected to confirm stock build.
💼 Trading Strategy & Market Outlook
Palm oil remains in a narrow range with bearish undertones. Traders are cautious ahead of government data and await clarity on:- How strongly can export demand absorb a growing supply
- Whether crude oil strength will continue to support vegetable oils broadly