According to data from the Mercantile Exchange Of VietNam (MXV), the final trading week of 2023 (December 25-31) saw mixed performances in commodity prices. Selling pressure dominated three out of the four commodity groups traded on MXV, pulling the MXV-Index down by 0.9% to 2,127 points. The average daily trading value for the week was approximately 5 trillion VND.

Oil Prices Fall After Two Weeks of Gains

By the end of the last trading week of 2023, oil prices closed in the red after two weeks of gains. Over the year, oil prices experienced declines in seven months and gains in four.

Specifically, WTI crude oil closed at 71.65 USD/barrel, down 2.6% from the previous week. Brent crude oil fell by 2.23% to 77.04 USD/barrel. Compared to the peak at the end of September, both crude oil types have lost about 20% of their value. Compared to the beginning of the year, WTI crude oil traded about 9 USD/barrel lower, losing about 11% compared to 2022, marking the largest annual decline since 2020.

According to MXV, the main reason for the decline in oil prices last week was the easing of tensions in the Red Sea, reducing shipping disruptions and allowing supply to flow more quickly, while demand showed no clear signs of improvement.

Some shipping companies have resumed operations in the region after the U.S. launched a multinational military operation to prevent Houthi attacks and ensure the safety of commercial vessels.

The Novorossiysk terminal, one of Russia's major oil transport ports, resumed operations after being suspended due to storms. Additionally, stable oil supply from Russia, the world's third-largest producer after the U.S. and Saudi Arabia, also pressured prices. Analysts suggest that Russian oil production is expected to stabilize or even increase in 2024 as the country has overcome most Western sanctions.

On the demand side, there were not many positive forecasts, adding pressure on prices. Stockpiles at the main storage hub in Cushing, Oklahoma, increased for the 11th week, reaching the highest level since August. U.S. crude oil production remained at a record 13.2 million barrels per day, demonstrating a strong increase in production activities outside OPEC countries.

A Reuters survey indicated that Brent crude oil prices are expected to average 82.56 USD/barrel in 2024, down from an estimated 84.43 USD/barrel in November; WTI crude oil prices were also adjusted down to an average of 78.84 USD/barrel, from 80.5 USD/barrel last month.

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

Corn Prices Weaken for Three Consecutive Weeks

By the end of the last trading week of 2023, corn prices slightly declined, marking the third consecutive week of weakening. The market saw relatively volatile movements, with a focus on South America. Besides improving weather prospects in Brazil, positive crop conditions in Argentina also drove selling pressure.

The Buenos Aires Grain Exchange (BAGE) reported that corn planting in Argentina is progressing well due to abundant rainfall. According to BAGE, Argentina has sown 69.9% of the planned corn area, higher than the 63% during the same period last year. In terms of quality, 38% of Argentina's corn area is rated good to excellent, significantly higher than 15% last year. Amid concerns about the crop in Brazil, improved supply in Argentina could partially offset market shortages.

In Brazil, showers are forecast to return this week, bringing beneficial moisture to dry areas. In the first two months of 2024, weather conditions are expected to improve in most regions. This will help farmers speed up the planting of corn and soybeans for the current season, reducing yield losses.

Contrary to corn, wheat recorded a strong gain of nearly 2% last week, maintaining its recovery momentum from the bottom. After a quiet period, the market once again worried about supply from the Black Sea as tensions in the region flared up again.

Although exports from the Black Sea continue as usual, increased tensions still cause market concerns about supply in the area.

Additionally, consultancy firm Argus Media reported that France's soft wheat planting area for 2024 is expected to reach only 4.24 million hectares, down 11% from this year and the lowest since 2000. This information further solidifies short-term concerns in the wheat market and supports strong price increases.

On the domestic market, as of the morning of December 28, imported South American corn prices at Vietnamese ports were relatively stable. At Cai Lan port, South American corn for January delivery was around 6,850 VND/kg. For Q2 delivery, the asking price ranged from 6,750 to 6,800 VND/kg. Meanwhile, the asking price for imported corn at Vung Tau port was 50 VND/kg lower than the price traded at Cai Lan port.

Source: MXV