Where the price sits now Malaysian CPO benchmark is about $1,143 per tonne, down 0.8% from the previous session, or roughly RM4,626 at an exchange rate of about 4.05 ringgit per dollar. The World Bank palm benchmark sits near $1,117, while Indonesia's Kemendag reference price is about $1,008. Brent crude is around $96/bbl, flat on the day but up 8.6% in the recent move, keeping biodiesel blending economics in focus.

What is pushing it up Five bullish forces are providing support. First, Indonesia's B50 biodiesel mandate is in force and has reached 90% of Pertamina fuel stations. Our model estimates this absorbs roughly 3–4 million tonnes per year of new palm demand, a structural support that raises the floor under CPO even when short-term data is soft. Second, El Niño remains active with an ONI of +1.8°C; because oil palm yields lag ENSO by 6–12 months, buyers are pricing potential production losses ahead even though current rainfall is broadly normal. Third, the BOPO spread is wide: soybean oil at about $1,527/MT versus palm at $1,143 leaves about a $383 discount for palm, encouraging demand switching toward the cheaper oil. Fourth, Brent crude near $96/bbl and the POGO spread around -$338/t at the 0th percentile make discretionary biodiesel blending economic, adding another demand channel. Fifth, technical signals are mildly supportive: a 5/20 SMA golden cross and positive MACD histogram, although RSI at 59 and price near the upper Bollinger band around $1,171 limit the immediate upside.

What is dragging it down The bearish side has four drivers. The most immediate is the next MPOB monthly release due in about six days; previews expect Malaysian palm oil inventories to hit a seven-month high, a bearish near-term signal. July's data already show ample supply: closing stocks at 1,429,316 tonnes, up 7.2% month-on-month and 61% above the five-year average, with a stocks-to-use ratio of 12.5%. Production is also rising, with July CPO output up 9.4% on the month to 1,792,979 tonnes. Speculative positioning adds vulnerability: CFTC soyoil managed-money net long is near 109,912 contracts, at the 85th percentile and up 21,470 week-over-week. That crowded long can amplify downward moves if momentum shifts. Seasonality is another headwind, with September historically averaging a 0.9% month-over-month decline. Indonesian export policy is a neutral check rather than a bearish driver: with the reference price at $1,008, a $126/MT levy and $148/MT export duty unchanged, the high total burden could slow exports if it were increased, and GAPKI warns against raising levies, but for now it does not shift the balance.

Which side has the upper hand Our model's factor count is five bullish against four bearish, so the upside currently has the upper hand. However, the published model outlook describes a tug-of-war: we expect choppy trade around $1,140–$1,160 with a slight downward bias into the data, followed by a rebound on supportive biodiesel and weather headlines. The anchor is three days stale, widening uncertainty. For the balance to flip bearish, the upcoming MPOB August report would need to confirm a larger-than-expected inventory build and trigger liquidation of the crowded speculative long, while the B50 and El Niño demand headlines fade. Conversely, if the stock build comes in below preview or biofuel and weather proof strengthens, the current bullish lean would be reinforced.