Data from the Mercantile Exchange Of VietNam (MXV) shows that global raw material markets experienced strong buying activity on March 29. The MXV-Index increased by 0.95% to 2,238 points, the highest in the past 4 months. The total transaction value on the exchange exceeded 6.1 trillion VND, up 21.6%. Notably, investment in agricultural products surged by 210%, accounting for 36% of the total transaction value. The energy sector led the market trend yesterday with all 5 products seeing price increases.

Corn Prices Surge 3.6%

According to MXV, at the end of trading on March 29, green was the dominant color on the agricultural commodity board. Corn prices surged by 3.57% after four consecutive sessions of decline, reaching the highest closing price since mid-February. The increase was driven by data on U.S. crop conditions released by the USDA last night.

Specifically, the USDA’s 2024 Planting Prospects Report revealed that the U.S. plans to plant more than 90 million acres of corn, significantly down from 94.64 million acres last year. This figure is also lower than the market forecast of 91.78 million acres and the USDA’s previous estimate of 91 million acres. This unexpected factor immediately pushed corn prices higher following the USDA report. Since mid-2023, corn prices have been on a downward trend due to global supply pressures, leading to lower production profits in the U.S. compared to the past three years. This has reduced farmers' production incentives and impacted market expectations for the U.S. crop season.

Additionally, the USDA reported that U.S. corn stocks as of March 1 were 8.35 million bushels, lower than the 8.43 million bushels forecasted by analysts. This discrepancy is due to significant improvements in U.S. export activity during the first quarter of this year. Both reports reflect a tightening supply situation and crop outlook in the U.S., contributing to the strongest corn price increase since September 2023.

Domestically, as of the morning of March 28, the price of imported South American corn at Vietnamese ports decreased slightly. At Cai Lan Port, April delivery South American corn was priced at 6,400 VND/kg, while May delivery prices ranged from 6,200 to 6,350 VND/kg. Prices at Vung Tau Port were 50 VND/kg lower compared to Cai Lan Port.

Oil Prices Hit Five-Month High

At the end of trading yesterday, all five energy products saw price increases, leading the overall market trend. Oil prices reached their highest level in five months. WTI oil closed up 2.24% at 83.17 USD per barrel, while Brent oil increased by 1.86% to 87 USD per barrel. Tightening supply, coupled with positive U.S. economic growth, supported oil prices.

After two adjustments, the U.S. Bureau of Economic Analysis reported that GDP growth for Q4 2023 was 3.4% compared to the previous quarter, higher than the previously reported preliminary figures. Thus, the world's largest economy ended 2023 with strong growth despite forecasts of a mild recession.

U.S. GDP grew by 2.5% in 2023, matching preliminary reports and up from 1.9% in 2022. Positive growth signals in the U.S., despite a high interest rate environment, contributed to expectations for future oil consumption. Oil prices increased significantly following the report’s release.

In terms of demand, March saw signs of recovery in Asia, with LSEG Oil Research data showing that Asia's total oil imports reached a 10-month high of approximately 27.48 million barrels per day.

Meanwhile, supply continued to show signs of tightening, which remains the primary factor pushing oil prices higher. Investors will be watching for signals from next week’s Joint Ministerial Monitoring Committee meeting of the OPEC oil-producing group. This group has been successful in driving oil prices higher through production cuts.

Top trader Gunvor Group forecasts that global oil prices could rise to 90 USD per barrel, while Trafigura notes that the focus of prices has shifted to "upside risks." On Wall Street, JPMorgan even warns that Brent oil prices could reach 100 USD per barrel if Russia fulfills its new commitment to shift focus from export cuts to production cuts.

Source: MXV