June 17, 2020 / 5:41 AM / 2 months ago

VEGOILS-Palm dips on caution over new wave of coronavirus cases

* Palm oil down 0.13%

* Market seeking fresh cues, expects range-bound trading- trader

* Fears around new coronavirus infections continue to weigh (Updates with midday prices, quote)

By Liz Lee

KUALA LUMPUR, June 17 (Reuters) - Malaysian palm oil futures slid marginally on Wednesday, as the market lacked fresh catalysts, while concerns over the rising number of new coronavirus infections weighed on the sentiment.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange dropped 0.13% at 2,353 ringgit ($550.41) a tonne at the midday break.

“At this level, the market is directionless awaiting news. Trading range would likely be around 2,330-2,360 ringgit per tonne,” a trader Kuala Lumpur-based said.

A resurgence of coronavirus cases has challenged market confidence in a rapid economic recovery, putting a drag on trading sentiment too, the trader said.

Additionally, oil prices retreated, weighed down by an increase in U.S. crude inventories and worries about a potential second wave of the COVID-19 pandemic.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Dalian’s most-active soyoil contract rose 0.04%, and its palm oil contract rose 1.34%. Soyoil prices on the Chicago Board of Trade shed 0.36%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

The tropical commodity may end its bounce around a resistance at 2,388 ringgit per tonne, and then resume its drop, Reuters technical analyst Wang Tao said. ($1 = 4.2750 ringgit)

Reporting by Liz Lee; Editing by Krishna Chandra Eluri and Rashmi Aich

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