Malaysian crude palm oil futures held near the $1104/MT mark on Thursday, gaining 0.2% from the prior session as a firmer crude oil market and bargain buying provided a floor. The global benchmark stood at about $1105/MT, while Indonesia's reference price was set around $1030/MT. The ringgit traded at 4.09 per dollar, adding a layer of cost support for ringgit-denominated contracts.

Supply picture: peak production lifts stocks

The latest MPOB data for June 2026 showed Malaysian CPO production at 1,638,777 tonnes, up 8.1% month-on-month, pushing closing stocks to 1,332,697 tonnes (+3.7% MoM). Exports rose 6.2% to 1,204,013 tonnes, while imports more than doubled to 103,113 tonnes, reflecting active regional arbitrage. Fresh fruit bunch reference prices slipped 1.3% to RM 48.90. The ongoing El Niño (ONI +1.0) continues to bring dry conditions to parts of Kalimantan, though key growing regions in Malaysia have so far avoided severe stress.

Demand drivers: crude, biodiesel, and Indian imports

Brent crude fell 1.3% to about $89/bbl, yet remained elevated enough to sustain biodiesel blending economics. Indonesia's rollout of the B50 biodiesel mandate — confirmed in recent weeks — underpins structural demand growth for palm oil as a fuel feedstock. However, India's edible oil imports dropped 30% in June, with palm and soybean oil shipments both declining sharply, capping near-term buying momentum. Reports of Nepal's duty-free edible oil exports to India also continue to stir tariff-arbitrage concerns among Indian crushers.

Market outlook: choppy range with upward bias

Our model outlook sees CPO trading in a choppy, slightly upward-biased range over the next seven days. A wide palm-soyoil spread is encouraging demand switching, while crowded speculative longs in the soy complex limit upside. Traders are positioning ahead of the mid-August MPOB release, which could inject additional volatility. The interplay between firm crude, biodiesel mandates, and ample Malaysian stocks will keep prices in a tight band.

Key takeaway for buyers

Watch for further cues from crude oil direction and any shifts in Indian import pace ahead of the festival season. The B50 mandate in Indonesia remains a structural demand driver, but near-term price gains may be capped by high stocks and subdued Indian buying.