According to the Mercantile Exchange Of VietNam (MXV), at the close of the first trading day of the week (June 3), a mix of green and red was seen on the global raw material commodity price board. Selling pressure was somewhat dominant, pulling the MXV-Index down by 0.64% to 2,300 points, the lowest in nearly three weeks, and extending the losing streak to the fourth consecutive day.

Soybean Prices Fall for 6 Consecutive Days

At the close of June 3, soybean prices ended in the red for the sixth consecutive session with a decrease of 1.7%. Market expectations for Argentina's upcoming soybean harvest were the main factor putting pressure on prices.

In Argentina, the Buenos Aires Grain Exchange (BAGE) maintained its forecast for this year's soybean production at 50.5 million tons. Furthermore, the country's national weather agency indicated that below-average rainfall in the western region of Argentina over the next three months will facilitate farmers in accelerating the soybean harvest. This has somewhat alleviated market concerns about the crop in Brazil, which has been affected by flooding in some areas over the past few weeks.

Additionally, according to the Export Inspections report last night, the U.S. Department of Agriculture (USDA) stated that the country exported 348,644 tons of soybeans for the 2023-2024 season during the week of May 24-30, higher than the 221,997 tons recorded the previous week. During Brazil's peak export period, the increase in shipping volume for two consecutive weeks reflects the gradually improving international demand for U.S. soybeans, somewhat mitigating the price decline.

In the domestic market, as recorded yesterday (June 3), the offer prices for South American soybean meal arriving at our ports were slightly adjusted downwards. At Cai Lan port, soybean meal for Q3 delivery ranged between 6,500 – 6,550 VND/kg. Meanwhile, for Q4 delivery, South American soybean meal was offered around 6,600 – 6,750 VND/kg. At Vung Tau port, the offer prices were 50 – 100 VND lower compared to Cai Lan port.

Oil Prices Hit 4-Month Low

At the close of June 3, oil prices dropped by 3 USD/barrel to the lowest level in nearly four months, as investors were concerned that the production decisions of the Organization of the Petroleum Exporting Countries (OPEC+) might lead to higher supply by the end of the year, despite slowing demand growth. By the end of the day, WTI oil fell to 74.22 USD/barrel, and Brent oil decreased to 78.36 USD/barrel.

Specifically, in the OPEC+ virtual meeting held last Sunday, OPEC+ agreed to extend the production cut of 3.66 million barrels per day by one year until the end of 2025 and to extend the voluntary cut of 2.2 million barrels per day by three months until the end of September 2024.

OPEC+ will gradually phase out the 2.2 million barrel-per-day cut over a year from October 2024 to September 2025, earlier than some observers had expected, causing market concerns about oversupply at the end of the year while demand tends to stagnate.

Goldman Sachs stated that the OPEC+ meeting sent bearish signals despite the extension of production cuts, as some countries indicated a gradual end to additional voluntary cuts.

According to a Bloomberg survey, OPEC's crude oil production remained stable while key members Iraq and the UAE continued to produce above their quotas. Specifically, OPEC produced an average of 26.96 million barrels per day in May, about 60,000 barrels more than in April.

In particular, Iraq pumped 4.24 million barrels per day in May, slightly more than the previous month and about 290,000 barrels above the target. The UAE, which is eager to deploy new production capacity, pumped 3.13 million barrels per day last month, about 218,000 barrels above the target.

Additionally, macroeconomic pressures are also tending to reduce oil consumption expectations and weigh on prices, especially in the U.S. economy. According to the Institute for Supply Management (ISM), the U.S. manufacturing purchasing managers' index (PMI) reached 48.7 points in May, the second consecutive month of contraction. The published figure contradicted the forecast of an increase to 49.8 points from 49.2 points in April.

Source: MXV