The Mercantile Exchange of Vietnam (MXV) reported that global commodity prices continued to fluctuate during yesterday's trading session (September 10). By the close, the red dominated, dragging the MXV-Index down by 1.45% to 2,048 points. Notably, in the energy market, oil prices fell to their lowest levels in three years due to weak demand pressures. Additionally, in the agricultural market, particularly soybeans, there was a tug-of-war in trading, with prices weakening significantly.

Oil prices drift further away from $70 per barrel

Global oil prices plummeted nearly 4% during yesterday's trading session after the Organization of the Petroleum Exporting Countries (OPEC) revised down its forecast for global crude oil demand. By the session's end, Brent oil prices had dropped by 4.31% to $65.75 per barrel, while U.S. WTI crude oil fell by 3.69%, down to $69.19 per barrel, marking the lowest level in three years.

According to data from China’s General Administration of Customs, last month, the country’s crude oil imports averaged 11.56 million barrels per day, the highest since August last year. However, total imports for the month reached 49.10 million tons, down 7% compared to the same period last year due to weak fuel consumption. The data also shows that imports in the first eight months of this year decreased by 3.1% compared to the same period last year, totaling 367 million tons.

The weakening demand, not only in China, has forced Asian refineries to cut production. Energy consultancy Energy Aspects noted that refineries in the region have had to reduce capacity by 400,000 - 500,000 barrels per day since May, and this is expected to continue until the end of the year.

Market pressure also surged after OPEC's September oil market report was released. OPEC stated that global oil demand would only increase by 2.03 million barrels per day in 2024, lower than the previous growth forecast of 2.11 million barrels per day. This is the second consecutive time the export group has lowered its demand growth forecast in its monthly report. OPEC also reduced its estimate of global demand growth in 2025 to 1.74 million barrels per day from 1.78 million barrels per day.

Meanwhile, in its September Short-Term Energy Outlook report, the U.S. Energy Information Administration (EIA) also lowered its forecast for U.S. energy demand this year by 0.2 million barrels per day to 20.3 million barrels per day.

Soybean prices fall to their lowest in a week

According to MXV, the agricultural market faced strong selling pressure during yesterday’s trading session. Soybeans led the decline in the group, dropping more than 2% to their lowest level in a week. The better-than-expected crop conditions in the U.S. eased concerns about recent dry weather, contributing to the price drop.

In the Crop Progress report, the U.S. Department of Agriculture (USDA) estimated that 65% of soybeans were rated as good to excellent, the same as the previous week, contrary to analysts' expectations of a 2% decrease. This figure is much higher than the 52% in the same period last year, indicating that despite some declines, the U.S. crop situation remains good. This brings about a positive outlook for crop yields this year, putting pressure on soybean prices.

In line with soybean price trends, corn prices recorded a nearly 1% drop yesterday. A positive supply outlook also added pressure to the market.

Ukraine's Minister of Agriculture said the production of cereals and oilseeds at the end of the season would no longer be severely affected by drought. However, corn production is expected to decrease by 10% to 15% compared to 2023, lower than the 15% previously projected.

Meanwhile, despite concerns about the weather, the planting progress of the first corn crop in Brazil's Paraná state has reached 18%, up 17 percentage points from last week. Weather conditions are expected to improve in Brazil next month, and rapid planting will benefit crops, providing a positive supply outlook for this year.

Source: MXV