Data from the Vietnam Commodity Exchange (MXV) shows that at the end of the first trading day of 2024, selling pressure dominated the global commodity markets. The MXV-Index dropped 0.78% to 2,111 points, extending its decline into the third consecutive session.

Soybean Prices Drop to Lowest Level Since June

According to MXV, at the close of the first trading session of 2024, soybean prices fell sharply by nearly 2%, reaching their lowest level since June. From the opening of the session, selling pressure was predominant. Heavy rains in Brazil's drought-stricken areas have given the market a more positive outlook on supply, putting pressure on prices.

The National Meteorological Institute (Inmet) reported that Brazil is expected to experience heavy rains and flood risks in the central and northern regions during the first week of January. Inmet forecasts heavy rains and strong winds in Rondonia, Mato Grosso, Goiás, Minas Gerais, Central Bahia, Piauí, and Maranhão. These areas have been experiencing drought with below-average rainfall since the beginning of the season in Brazil. Additionally, Rio Grande do Sul and Santa Catarina in southern Brazil will also receive 20mm to 40mm of rain in the coming days. Inmet also predicts rain in Paraná, but with a lower probability.

In the context of drought in northern and central Brazil, heavy rains will compensate for the lack of moisture and help crops recover from yield damage, improving production.

Moreover, in the Export Inspections report, the U.S. Department of Agriculture stated that soybean export shipments were only 962,000 tons, lower than 1.12 million tons the previous week and 1.48 million tons during the same period last year. Since the start of the 2023/24 season, the shipment-to-export ratio for the entire season has only reached 43.2%, lower than 49.14% in the same period last year. This indicates that U.S. shipments are facing certain difficulties due to congestion at the Panama Canal, adding pressure to the market.

Similarly, soybean meal also weakened in the first trading session of the new year. In Argentina, the world's largest soybean meal producer, the weather in major production areas remains generally favorable. Abundant rainfall since the beginning of the season has helped farmers accelerate planting activities, supporting crop development. With good soybean supply prospects, the market expects a strong recovery in soybean meal production in Argentina next year.

On the domestic market, as of December 28, the price of imported South American soybean meal at Vietnamese ports has been slightly adjusted down. Accordingly, the offered price of South American soybean meal at Cai Lan Port is 13,600 VND/kg. For the second-quarter delivery, soybean meal prices range around 13,100 - 13,400 VND/kg. At Vung Tau Port, the offered price is about 150 VND lower compared to Cai Lan Port.

Sugar Prices Surge from Low Levels

After dropping to the lowest levels in eight months, sugar prices increased by 1.55% by the close of the trading session on January 2. Low sugar production in India, combined with less-than-normal rainfall in Brazil, supported price increases in the first session of the new year.

The Indian Sugar Mills Association reported that from October 1 to December 31, the country produced 11.21 million tons of sugar, down 7.6% compared to the same period last season. Lower rainfall has reduced sugarcane yields, leading to decreased sugar production.

Additionally, dealers are paying attention to the below-average rainfall in Brazil in late 2023. This could affect future sugarcane yields and sugar production.

For coffee, Arabica prices rose slightly by 0.98% while Robusta prices continued to drop by 1.3% compared to the reference. Supply concerns persist in the market, preventing Arabica prices from extending their decline.

As of the December 29 session report, the total certified Arabica on ICE-US stood at 251,224 bags of 60kg, a decrease of 7,175 bags from the previous session. Uncertainty about inventory recovery keeps supply concerns on the market.

Moreover, forecasts indicate that heat waves will continue to threaten Brazil's coffee supply outlook for the 2024/25 season. The Minas Gerais Water and Meteorology System (Simge) reports that average temperatures in the first quarter of 2024 in Brazil’s main coffee-growing regions may be 2°C higher than normal. This slows coffee plant development for the 2024/25 season. With current low inventories, Brazilian farmers are concerned about supply, which limits sales.

On the domestic market, as of this morning (January 3), coffee bean prices in the Central Highlands and southern provinces have uniformly decreased by 300 VND/kg. Accordingly, domestic coffee is currently purchased around 67,300 – 68,200 VND/kg.

Source: MXV