The palm oil market is drawing considerable attention as prices on the Malaysian Derivatives Exchange (MDEX) have edged higher, signaling renewed strength in the edible oil complex. After a period of moderate gains, the benchmark September 2025 contract closed at MYR 4011/t, up 46 points or 1.15% week-on-week. This rally comes as market participants weigh robust regional demand, shifting global trade flows, and persistent concerns about weather disruptions in key growing regions. The market’s mood is cautiously bullish, supported by re-accelerating demand from China and India and a weaker Ringgit, yet persistent macro headwinds and heavy stocks in Indonesia temper further upside. Recent speculative activity and increased volumes underscore how even moderate supply or weather news can jerk palm oil prices sharply in either direction.

📈 Prices: Recent Developments on the MDEX

🌍 Supply & Demand Drivers

• Malaysia’s palm oil exports rose strongly in June, driven by higher Chinese and Indian buying ahead of seasonal festivals.
• Indonesia’s stocks remain heavy but inventories are slowly drawing down as biodiesel demand picks up and export controls incentivize shipments.
• Alternative edible oils remain expensive due to poor soyoil and sunflower seed harvests in South America and Black Sea, supporting palm oil values.
• The Ringgit’s weakness vs. the USD is making Malaysian palm oil more competitive on the export market, undergirding prices.
• Speculators increased long positions, as revealed by latest CFTC and local exchange data, reflecting bets on tighter supplies ahead.

📊 Market Fundamentals & Comparison

Note: Mt = million tonnes

☀️ Weather Outlook

• Southeast Asia: Forecasters are tracking a return of scattered rains in key Malaysian and Indonesian palm regions—but recent dryness may have trimmed potential yields, especially in Sumatra and southern Peninsular Malaysia. The 2-week outlook suggests better rainfall, reducing immediate drought fears but raising concerns over flooding if patterns intensify. Crops may see stabilizing yields if normal wet season progress resumes.
• India: The monsoon remains erratic in major vegetable oil consumption states, increasing domestic edible oil demand as local oilseed output faces pressure.

📌 Trading Outlook & Recommendations

• Current uptrend is supported by seasonal export strength and weather risks; consider holding long positions but trail stops tightly.
• Watch for confirmation of improved rains in Southeast Asia; price corrections could develop if weather fears subside.
• Monitor movements in competing soyoil and sunflower oil markets – any price drop there could curb palm oil gains.
• Exporters should accelerate shipments on weak Ringgit and firm prices.
• End users may cover near-term needs but can wait for potential dips in late July if production recovers and weather stabilizes.

📆 3-Day Price Forecast (MDEX, MYR/t)

Sentiment remains constructive but weather and export headlines could drive volatility. Traders should remain alert to new data and technical signals.