Where the price sits now Malaysian CPO benchmark is about $1,150/MT, down 1.0% from the previous session (RM4,647/MT). The World Bank benchmark is $1,101/MT and Indonesia’s reference is $997/MT. CPO is near 52-week highs after a 7-day +3.1% rally to the upper Bollinger Band, but the Aug 24 session already closed lower. Brent is $85/bbl (-0.5%), USD/MYR 4.04.

What is pushing CPO up The widest current support is the BOPO spread. Soybean oil at $1,477/MT against CPO at $1,150/MT leaves a $328 discount for palm, encouraging importers in India and elsewhere to switch demand toward palm. Still-negative POGO also provides biodiesel blending support at the margin, though weaker Brent is reducing that tailwind. Indonesia’s export policy is second: the August reference price of $997/MT implies a $125 levy plus $148 export duty, about $273/MT total; combined with rising revenue projections and the B50 push, that can slow Indonesian export flows and support Malaysian CPO. El Niño is a slower burn: ONI +1.4°C signals strengthening El Niño, historically bullish for palm through a 6-12 month yield lag, but it is not a day-to-day driver.

What is pushing CPO down The July MPOB report is the main weight. Closing stocks rose 7.2% MoM to 1,429,316 t, about 61% above the five-year average with a stocks-to-use ratio of 12.5%, even as CPO production rose 9.4% MoM to 1,792,979 t and exports rose 14.5% MoM to 1,392,178 t. Peak production season is underway and seasonal production is expected to rise about 7% next month, adding supply pressure. Technicals are overstretched: RSI 69, price at the upper Bollinger Band $1,150, and a five-session rally through Aug 21 leave the market vulnerable to profit-taking. Weaker Brent has fallen 7% in seven days to $85.2, reducing energy-complex support for biodiesel feedstock demand despite still-negative POGO. September is a seasonal headwind, averaging -0.9% MoM historically, while the July-October production cycle keeps supply pressure intact. Speculative positioning is crowded: CFTC soyoil managed money net long is +98,237 contracts, 82nd percentile, so long liquidation could spill into palm. A weak rupiah at USD/IDR 17,726 encourages aggressive Indonesian export selling, regionally bearish for CPO. Festival demand is not yet active: Diwali is 74 days away and the buying window opens in roughly 25 days, so near-term demand has no festival cushion.

Which side has the upper hand The balance is three bullish factors versus six bearish factors, so the downside currently has the upper hand. Our model outlook expects a mild mean-reverting pullback over the next 7 trading days, with downside limited by Indonesia policy tightening and El Niño anticipation; the published path is +0.2% over 7 sessions. For that balance to flip, the market would need a more obvious demand response to the wide BOPO spread, a clear interruption of Indonesian exports from policy, a stabilization or rebound in Brent, or faster confirmation that El Niño will cut future yields. Until the peak-production stock overhang and profit-taking are absorbed, bounces are likely to stay shallow.