18.06.2020 (The Edge Markets MY) - SINGAPORE (June 18): Malaysian palm oil futures rose for a third straight session on Thursday as rival oils gained, although fears of another wave of coronavirus infections and higher production capped gains.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange traded up 0.2% at RM2,366 a tonne in early trade.

Malaysian palm oil futures closed higher on Wednesday, as stockpiling due to concerns over the rising number of new coronavirus infections pushed prices higher on the Dalian Commodity Exchange.

Dalian's most-active soyoil contract were up 0.5% and its palm oil contract rose 0.2%, while soyoil prices on the Chicago Board of Trade shed 0.5%.

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

Capping gains is the anticipation of more coronavirus cases in China and higher production, although higher exports will likely limit the downside, a Kuala-Lumpur based trader told Reuters.

Palm oil may drop to RM2,308 per tonne, as it could have completed a bounce from the June 15 low of RM2,294, Reuters analyst, Wang Tao said.

Fundamentals

* Oil prices fell around 2% on Thursday as a spike in new coronavirus cases in China and the United States renewed fears that people would stay home, stalling a recovery in fuel demand even as lockdowns ease.

* US wheat futures hit an eight-month low on Thursday due to bumper global crop stocks.

* Asian stocks were set to dip on Thursday after a choppy Wall Street session as spiking coronavirus cases and prospects of new lockdowns erased earlier confidence about a global economic recovery.

* The US dollar held onto gains on Thursday as growing concerns about a rise in coronavirus cases underpinned safe-haven demand for the US currency.

https://www.theedgemarkets.com/article/palm-trades-edges-higher-tracking-rival-oils