According to the Mercantile Exchange Of VietNam (MXV), with three consecutive days of decline over the weekend, the MXV-Index commodity price index closed the week down by 1.3% to 2,315 points. Among the seven commodities, six experienced significant declines, with the agricultural sector leading the market trend. The MXV-Index Agricultural index dropped by 3.18% to 1,437 points.

Corn Prices Record Largest Weekly Drop in 3 Years

At the end of the trading week from May 27 to May 31, commodities imported by Vietnam for animal feed, such as corn and soybean meal, experienced sharp declines of 4% and 5.6% respectively. Corn prices on the Chicago Exchange closed the week at $175.88 per ton, and soybean meal prices closed at $402.01 per ton, both marking their lowest levels since early May. Other agricultural commodities such as soybeans, wheat, and rough rice also saw significant declines.

According to MXV, positive signals regarding supply prospects from major supplying countries led to an overwhelming sell-off in corn during the past trading week.

The Buenos Aires Grain Exchange (BAGE) estimated that as of May 23, the progress of corn harvesting in Argentina had reached 28.2% of the planted area. Additionally, key agricultural regions are expected to experience a cold, dry air mass, with potential localized frosts in the coming week. This provides ideal conditions to control the spread of fall armyworms and somewhat alleviates supply concerns in the market.

Meanwhile, the progress of corn planting in the U.S. as of May 26 had reached 83% of the area, up 13 percentage points from the previous week, according to the USDA's Crop Progress report. Additionally, corn emergence also increased by nearly 20 percentage points compared to the previous week, reaching 58%. Dry weather in the Midwest has allowed farmers to accelerate planting.

On the domestic market, as of the end of last week (May 31), imported South American corn prices in Vietnam adjusted downward. Specifically, at Cai Lan port, the price of corn for Q3 delivery this year was offered in the range of 6,500 – 6,700 VND/kg; and 6,700 VND/kg for delivery in Q4. At Vung Tau port, the offered price was recorded as 100 VND/kg lower than at Cai Lan port.

The wheat market faced pressure from a three-day downward adjustment over the weekend. Besides the profit-taking after the holiday break, positive signals regarding supply prospects in European countries also put pressure on prices.

Specifically, the European Commission (EC) maintained its forecast for the EU's 2024-2025 wheat production at 120.2 million tons. However, ending wheat stocks for the 2024-2025 season are expected to rise to 13.5 million tons, up from the 12.2 million tons recorded last month. This somewhat alleviates the pressure on global supply.

In China, LESG raised its forecast for the country's winter wheat production to 139.9 million tons. For the next two weeks, key growing regions will remain in a warm and dry weather pattern, facilitating harvest activities. If confirmed, this will be a record-high production level due to expanded planting areas and favorable weather.

Coffee Prices Extend Recovery

Coffee prices continued their recovery. Robusta prices rose significantly by 5.86%, and Arabica prices increased by 1.88% from the reference point. Frost warnings in Brazil combined with concerns over shrinking supply in major producing countries continue to support prices.

The National Meteorological Institute (Inmet) warns of potential frost risks in Campinas, Macro Metropolitana, and Vale do Paraíba Paulista, and the South/Southwest of Minas, extending to cities like Campos do Jordão (SP) and Extrema (MG). Frost occurrences not only delay the 2024-2025 coffee harvest in Brazil but could also damage future production if coffee plants die off.

In its second 2024 crop survey, Brazil's government Crop Supply Agency CONAB lowered its forecast for Robusta coffee production by 600,000 bags, to 16.7 million bags in the latest report.

Additionally, StoneX estimates that Vietnam's coffee production may only reach 24 million bags, the lowest level in four years. Analysts indicate that climate change is reducing supply in Vietnam.

On the domestic market, although prices adjusted downward at the end of last week with a relatively strong decline of 3,500 – 4,000 VND/kg, bringing the purchase price of domestic coffee to 119,000 – 120,000 VND/kg, compared to the previous week, Robusta coffee prices in the Central Highlands and Southern provinces still increased by about 5,000 VND/kg.

Sugar prices fell an additional 0.6%, remaining at their lowest level in over a year. The expansion of supply in Brazil continues to be the main pressure on prices. According to Unica's report, Brazil's sugar production in the second half of April increased by 84% compared to the same period last year, reaching 1.84 million tons. For the 2024-2025 season, sugar production has increased by 65.9% compared to the previous season, reaching 2.55 million tons. Additionally, the monsoon rains hitting the southern coast of India two days earlier than expected help bolster the outlook for a bountiful sugar harvest.

Source: MXV