The Mercantile Exchange of Vietnam (MXV) reported that the global raw material commodity market experienced a mixed and fluctuating trend in the early-week trading session on September 16th. Many commodities in the energy and metals groups simultaneously increased in price, while the agricultural and industrial raw materials markets saw a return to a downward trend. However, the prevailing buying pressure pushed the MXV-Index up by 0.43%, reaching 2,122 points.

Oil Prices Rebound Above $70 per Barrel

At the end of the first trading day of the week on September 15th, oil prices rebounded as the market focused on evaluating the potential interest rate cut by the Federal Reserve (Fed) in the upcoming meeting. By the session's close, WTI crude oil prices had risen by 2.1% to $70.09 per barrel, while Brent crude oil increased by 1.59% to reach $72.75 per barrel.

The oil market remains cautious ahead of the Fed's policy meeting on September 17-18. However, prices continue to receive support from supply concerns due to ongoing disruptions in oil production in the Gulf of Mexico.

Traders are increasingly betting on the Fed cutting interest rates by 50 basis points instead of the previously expected 25 basis points. While a Fed rate cut is almost certain, the market's expectation of a 50-basis-point cut could significantly boost oil prices. Lower interest rates typically reduce borrowing costs, potentially spurring economic activity and increasing oil demand. However, experts also warn that a 50-basis-point cut could signal weakness in the US economy, which might limit gains in the market.

Meanwhile, oil production activities in the Gulf of Mexico remain disrupted following Hurricane Francine. About 20% of the total crude oil production in the region is still stalled, with accumulated offshore production losses reaching 2.16 million barrels of crude oil. Workers at 37 drilling rigs, accounting for about 10% of the total rigs operating in the Gulf of Mexico, remain evacuated.

On the other hand, weaker economic data from China has exerted pressure on the market, with low long-term growth prospects in the world's second-largest economy raising concerns about global oil demand. Refining output also fell for the fifth consecutive month due to weak fuel demand and limited export margins. A total of 1.85 million barrels per day were added to the country's reserves, the largest since June 2023.

Soybean Prices Continue to Fluctuate in Early-Week Session

November soybean prices fluctuated in the early-week trading session amid mixed impacts on the demand for US soybeans. By the end of yesterday's session, soybean prices recorded a slight decrease of 0.17%, settling at $369 per ton, while the prices of the two soybean products slightly increased, with soybean meal rising by 0.28% and soybean oil by 0.46%.

In the Export Inspections report released last night, the US Department of Agriculture (USDA) indicated that the volume of US soybeans exported in the week ending September 12th reached nearly 401,290 tons, an increase of about 10% compared to the previous week. Additionally, the USDA reported that exporters sold a large order of 132,000 tons of soybeans for the 2024-2025 crop year to an unnamed country. These reports suggest that international demand for US soybeans has recovered, supporting the price of this commodity.

However, domestic soybean demand in the US plummeted in August, exerting significant pressure on prices. Specifically, the National Oilseed Processors Association (NOPA) reported that the soybean crush volume in the US in August was 158 million bushels, down 13.6% from July and 2.1% lower than the same period last year. This is the lowest monthly soybean crush volume recorded since September 2021.

Conversely, prices for the two soybean products closed in green, primarily due to the impact of the NOPA report. Soybean meal prices rose by 0.28%, while soybean oil prices increased by 0.46%. The sharp decline in the US soybean crush volume in August could reduce the short-term supply of soybean meal, supporting prices. Meanwhile, soybean oil inventories held by NOPA members as of the end of August reached 516.3 million tons, the lowest level in the past 10 months.

Source: MXV