Data from the Vietnam Commodity Exchange (MXV) shows that during the last trading week of 2023 (December 25 - 31), raw material prices exhibited relatively mixed trends. Selling pressure dominated in three out of four commodity groups traded at MXV, causing the MXV-Index to decline by 0.9% to 2,127 points. The average daily trading value for the week was approximately 5 trillion VND.

Oil Prices Sink into the Red After Two Weeks of Increase

According to MXV, oil prices closed the last trading week of 2023 in the red after two weeks of price increases. Over the course of the year, oil prices saw seven months of declines and four months of increases.

Specifically, WTI crude oil prices were at $71.65 per barrel, down 2.6% from the previous week. Brent crude oil decreased by 2.23% to $77.04 per barrel. Compared to the peak at the end of September, both crude oil products have fallen by about 20%. Compared to the beginning of the year, WTI crude is traded about $9 per barrel lower, losing approximately 11% compared to 2022, marking the largest annual decline since 2020.

MXV attributes the main reason for the recent drop in oil prices to easing tensions in the Red Sea and reduced disruptions in transportation, which allowed supply to be expedited, while demand has not shown clear signs of recovery.

Some shipping companies have resumed operations in the region after the U.S. launched multinational military activities to prevent attacks by Houthi forces and ensure the safety of cargo ships.

Novorossiysk port, one of Russia’s major oil transport hubs, which had been suspended due to storms, has also resumed operations. Additionally, stable oil supply from Russia, the world's third-largest producer after the U.S. and Saudi Arabia, has pressured prices. Analysts expect Russia's oil production to remain stable or even increase in 2024, as the country has largely navigated Western sanctions.

Demand forecasts are also not very positive, adding pressure on prices. Crude oil reserves at the main storage center in Cushing, Oklahoma (U.S.) have risen for the 11th week, reaching the highest level since August. U.S. crude oil production continues at a record 13.2 million barrels per day, highlighting a strong increase in production activities outside OPEC.

Reuters' survey indicates that Brent crude oil prices are expected to average $82.56 per barrel in 2024, down from the November estimate of $84.43 per barrel; WTI crude oil prices are also adjusted down to an average of $78.84 per barrel, from $80.5 per barrel last month.

Analysts suggest that weak global growth will limit oil consumption. However, geopolitical risks surrounding Middle Eastern tensions and OPEC+ production plans will make oil price movements unpredictable in the new year.

**Corn Prices Weaken for Three Consecutive Weeks**

In the last trading week of 2023, corn prices experienced a slight decline, marking the third consecutive week of weakness. The market was relatively volatile, with a focus on South America. Alongside improved weather prospects in Brazil, positive harvest conditions in Argentina also contributed to selling pressure.

The Buenos Aires Grain Exchange (BAGE) reported that corn planting in Argentina is progressing well due to ample rainfall. According to BAGE, Argentina has planted 69.9% of the expected corn area, up from 63% at the same time last year. Quality-wise, 38% of Argentina’s corn area is rated good to excellent, significantly higher than 15% last year. Amid concerns about Brazil’s harvest, the improved supply in Argentina may offset some market shortages.

In Brazil, rainfall is forecasted to return, bringing beneficial moisture to dry areas. In the first two months of 2024, weather conditions are expected to improve across most regions. This will help farmers accelerate corn and soybean planting for the current season, reducing yield losses.

In contrast to corn, wheat recorded a strong increase of nearly 2% over the past week, maintaining its recovery from the low. After a period of relative quiet, the market is once again concerned about supply from the Black Sea as the region heats up.

Although exports from the Black Sea continue normally, increased tensions still raise concerns about supply conditions in the area.

Additionally, consulting firm Argus Media reported that France’s soft wheat planting area for 2024 is expected to reach only 4.24 million hectares, an 11% decrease from this year and the lowest level since 2000. This information further strengthens short-term wheat market concerns and supports a significant price increase.

On the domestic market, as of the morning of December 28, the price of imported South American corn at our ports remained relatively stable. At Cai Lan port, South American corn for January delivery was around 6,850 VND/kg. For the second-quarter delivery, prices ranged from 6,750 to 6,800 VND/kg. Meanwhile, imported corn prices at Vung Tau port were recorded 50 VND/kg lower than at Cai Lan port.

Source: MXV