Malaysian CPO settled around $1,144/MT (RM4,626/MT), up 1.2 percent from the previous session. The World Bank benchmark for palm oil is about $1,101/MT, while Indonesia's reference price is roughly $997/MT. Brent crude rose 0.6 percent to about $94/bbl, supporting biodiesel blending economics. The ringgit is around 4.04 per dollar. CPO futures ended the week higher for a fifth straight session.

Fundamentals

MPOB data for July show Malaysian CPO production at 1,792,979 tonnes, up 9.4 percent month on month. Closing stocks rose 7.2 percent to 1,429,316 tonnes, while exports climbed 14.5 percent to 1,392,178 tonnes. Imports dropped 51.9 percent to 49,566 tonnes. The FFB reference price increased 1.2 percent to RM49.50, and the stocks-to-use ratio stands at 12.5 percent. Ample inventories are a counterweight to the tightness narrative.

News flow remains tilted bullish. B50 and El Niño are cited as key catalysts. Indonesia's transition to the B50 mandate is expected to lift CPO demand, with government efforts to accelerate smallholder replanting. Indonesian export levy collections are projected to reach Rp41.22 trillion this year, and the palm oil fund agency says B50 has not suppressed exports while levies rose 73 percent. Weather remains a concern: ENSO is El Niño with an ONI of +1.4, and Kalimantan is dry. Analysts warn the El Niño could threaten Indonesian CPO output, while B50 stocks and export levies are vulnerable.

Model outlook

BMI has raised its 2026 average CPO price forecast to RM4,453 on tight supply. MPOC expects CPO to stay above RM4,600 in September on tightening supply and geopolitical disruptions. Our model outlook sees CPO near 20-month highs with bullish post-anchor headlines, B50 demand and a wide BOPO spread. But RSI at 73 and price above the upper Bollinger Band flag overbought risk; MPOB July stocks are ample and September seasonality is soft. The base case is modest near-term upside with a likely 3-5 day technical pullback. Missing Bursa quotes and a stale anchor widen uncertainty, with a published path of +0.9 percent over seven sessions.

For buyers

Watch whether Malaysian CPO can hold above RM4,600 against overbought momentum, how quickly Indonesia's B50 procurement translates into physical offtake, and any confirmation of El Niño dryness in Kalimantan. Ample July stocks and soft September seasonality could cushion sudden upside, but a close above current levels would test the model's 3-5 day pullback base case.