Malaysian CPO benchmark trades about $1,154/MT (RM4,664/MT) on 4 September 2026, up 0.1% from the previous session. The World Bank global benchmark sits near $1,117/MT and Indonesia’s reference price is about $1,008/MT. Brent crude is around $96/bbl, down 0.3% on the session, with USD/MYR at about 4.04. The market is holding near the upper end of its recent range, and our model’s published path is roughly flat at +0.1% over seven sessions.

What is pushing CPO higher

The widest demand-switch lever is the soy-palm spread. At $384/MT, palm oil is heavily discounted to soybean oil, making it the cheapest major edible oil for price-sensitive buyers. Even though weak CBOT soy tempers immediate spillover, the discount is wide enough to keep palm demand sticky and discourages substitution away from palm.

El Niño is intensifying supply concerns. The ONI is at +1.8°C, Kalimantan rainfall is notably dry, and headline warnings such as GAPKI’s Indonesian output-drop warning are underpinning bullish sentiment. The yield impact is lagged, but the fear of future tightness can trigger forward buying and discourage aggressive selling.

Indonesia’s B40-to-B50 rollout is the largest single demand variable. Full B50 is targeted for 1 October 2026, with national distribution reported at 80%. This absorbs roughly 3–4 million tonnes per year. By diverting Indonesian palm oil into domestic biodiesel, it reduces exportable supply and supports Malaysian CPO.

Indonesian export charges are also shifting demand toward Malaysia. The September reference price of $1,008/MT gives a $126 levy plus a separate $148 export duty. Those high total charges squeeze Indonesian exporter margins, making Malaysian cargoes more competitive and potentially shifting demand to Malaysia.

Brent strength and a negative POGO add support. Brent is up 6.4% over seven sessions at about $95.5–96/bbl. With POGO at -$327/t, palm is cheaper than gasoil, which supports discretionary biodiesel blending and keeps palm anchored to energy markets.

What is capping CPO

The biggest bearish force is peak production and high stocks into the next MPOB release. July CPO production was 1,792,979 tonnes, up 9.4% month-on-month, and closing stocks reached 1,429,316 tonnes, up 7.2% month-on-month. Stocks are 61% above the five-year average and the stocks-to-use ratio is 12.5%, which is ample. The August seasonal path adds another 7% production and 6.7% stocks, and the next MPOB release in about seven days creates downside positioning risk if the data confirm the build.

September seasonal softness is a known headwind. Historically, September averages -0.9% month-on-month because the Malaysian production cycle peaks from July to October. That seasonal pattern makes rallies harder to sustain without a fresh demand surprise.

Technical resistance is also limiting upside. RSI is 67, near overbought, and price is near the $1,170 upper Bollinger band. Momentum z-score is -0.39, suggesting consolidation or pullback risk rather than a clean breakout.

Speculative long crowding in the soyoil complex adds liquidation risk. CFTC managed-money net long is at the 79th percentile, but it fell 9,795 contracts. Crowded longs are vulnerable if soybean oil weakens further, which could spill into palm via fund flows.

The balance today

Our model outlook is not outright bullish: the near-term path is roughly flat at +0.1% over seven sessions, with missing cargo-surveyor export pace and Bursa FCPO quotes widening uncertainty. But the factor balance is 5 bullish versus 4 bearish, so the upside currently has the upper hand. Supply-side headlines keep a lid on prices, but the demand-side levers—BOPO discount, El Niño, Indonesian B50 uptake, export burden and negative POGO—are strong enough to absorb dips and prevent a sharp breakdown.

For the balance to flip decisively bearish, the next MPOB release would need to show an August stock build above the seasonal +6.7% path, a clear break below the recent Bursa FCPO consolidation range, or a sharp CBOT soy decline that forces speculative long liquidation. To extend the upside, we would need confirmation of faster Indonesian B50 uptake, stronger export pace, or a further widening of the BOPO spread.