Malaysian benchmark CPO settled near $1,130 per tonne, or RM4,595 per tonne, up 0.6% on the session. That puts it just below the RM4,600 mark that several Malaysian trade sources see as a near-term floor for September, and nearby futures have touched their highest since April. Further out, the February 2027 contract was reported above RM5,071 per tonne. BMI lifted its 2026 average CPO forecast to RM4,453 per tonne, while global reference prices remain layered: the World Bank palm oil benchmark is near $1,101 per tonne and Indonesia's reference near $997 per tonne.

Supply picture: ample now, risky later MPOB July data show Malaysian production jumped 9.4% month-on-month to 1,792,979 tonnes, with exports up 14.5% to 1,392,178 tonnes and imports down 51.9% to 49,566 tonnes. Closing stocks rose 7.2% to 1,429,316 tonnes, leaving a stocks-to-use ratio of 12.5%; FFB reference edged up 1.2% to RM49.50 per tonne. On paper, that is a comfortable buffer, but the market is looking through this lagged data.

El Niño conditions, with ONI at +1.4 and dry weather in Kalimantan, are feeding concern about future Indonesian output, and some reports warn of an El Niño 'Godzilla' effect on production. Indonesia's B50 biodiesel ramp and heavy export levies could further tighten the volume of palm oil available globally, while firm Brent crude near $92 per barrel supports blending economics.

Demand: biodiesel and festival buying The $407 per tonne discount of CPO to soybean oil keeps palm attractive to price-sensitive buyers. India's cooking-oil imports have strengthened ahead of festival season, and edible oil inflation warnings linked to the Black Sea war and El Niño are circulating. Indonesia's B50 transition remains a key demand-side wildcard; reports suggest both biodiesel stock coverage and export levy revenue may be strained.

Model view Our model outlook sees CPO entering the next seven sessions in a short-term uptrend, supported by the BOPO discount, B50, El Niño supply fears and firm Brent. However, the ample July stocks-to-use of 12.5% and crowded CFTC soyoil positioning create long-liquidation risk. The absence of cargo-surveyor export data this run adds uncertainty. Base case is modest gains with volatile pullbacks; the published path is +0.2% over seven sessions.

What to watch - Whether Malaysian benchmark holds above RM4,600. - Fresh August export or stock estimates. - Indonesia's B50 implementation and levy settings. - Weather updates on El Niño and Kalimantan dryness. - CFTC soyoil positioning for short-term swings.