In common with many strongly correlated electron systems, intermediate valence compounds are believed to display a crossover from a high-temperature regime of incoherently fluctuating local moments to a low-temperature regime of coherent hybridized bands. We show that inelastic neutron scattering measurements of the dynamic magnetic susceptibility of CePd3 provides a benchmark for ab initio calculations based on dynamical mean field theory. The magnetic response is strongly momentum dependent thanks to the formation of coherent f-electron bands at low temperature, with an amplitude that is strongly enhanced by local particle-hole interactions. The agreement between experiment and theory shows that we have a robust first-principles understanding of the temperature dependence of f-electron coherence.