Prices

Malaysian crude palm oil futures settled the week around $1,144 per metric ton, up 1.2% on the session and near 20-month highs. The global benchmark, as tracked by the World Bank, stood at about $1,101/MT, while Indonesia's reference price was set at roughly $997/MT. In ringgit terms, the benchmark closed at RM 4,626/MT.

Energy and FX

Brent crude held steady at about $94 per barrel, with no change on the week. The flat crude market keeps biodiesel blend economics in focus, particularly for Indonesia's B50 program, which remains a key demand driver for palm oil. In currencies, the ringgit traded at 4.04 per dollar, while the rupiah weakened to 17,744 per dollar, making Indonesian exports more competitive in dollar terms.

MPOB Data

Malaysia's July data, released this month, showed a robust supply picture. CPO production rose 9.4% month-on-month to 1,792,979 tonnes, while closing stocks climbed 7.2% to 1,429,316 tonnes. Exports jumped 14.5% to 1,392,178 tonnes, reflecting strong overseas demand. Imports, however, plunged 51.9% to 49,566 tonnes. The FFB reference price inched up 1.2% to RM 49.50.

Weather and ENSO

El Niño conditions persist, with the ONI index at +1.4. Rainfall has been notably dry in Kalimantan, a key Indonesian producing region, raising concerns about future output. The dry spell could tighten supplies in the coming months, though current stocks remain adequate.

Our Model Outlook

Our model outlook sees modest near-term upside, with a projected path of +0.9% over the next seven sessions. However, technical indicators flash caution: the RSI is at 73, and prices sit above the upper Bollinger Band, suggesting overbought conditions. A 3-5 day technical pullback is likely. The model also notes that MPOB July stocks are ample and September seasonality tends to be soft. Uncertainty is elevated due to missing Bursa quotes and a stale price anchor.

Week Ahead

Traders will watch for any scheduled data releases, including export estimates from cargo surveyors and updates on Indonesia's B50 implementation timeline. Weather forecasts for Kalimantan and other dry areas will be closely monitored. With prices near multi-month highs and technicals stretched, the market could see consolidation unless fresh demand or supply news emerges.