The Mercantile Exchange Of VietNam (MXV) reported that the flow of capital into the global raw material markets remained cautious during yesterday's trading session (August 22). Overwhelming selling pressure dragged the MXV-Index down by an additional 0.59% to 2,102 points, extending its losing streak to three consecutive sessions. By the close, the red color dominated nearly the entire price board of the metals and agricultural products groups.

USD Recovery Pressures Metal Prices

The metal market was ablaze yesterday, with most metal prices dropping by 1-2%. For precious metals, the strengthening USD put pressure on silver and platinum prices. By the close, platinum prices reversed and dropped by 2.01%, while silver prices weakened by 1.65%, ending a five-session winning streak.

On August 22, at the Jackson Hole Economic Symposium, Federal Reserve (FED) policymakers expressed support for a rate cut next month, citing the significant cooling of US inflation and a weakening labor market. However, some officials advocated for a cautious and slow approach, contrary to market expectations.

This dampened market confidence in the FED cutting rates next month. Combined with better-than-expected service PMI data, the USD rebounded during yesterday’s session. The Dollar Index recovered from an eight-month low with a 0.46% increase to 101.51 points, ending a five-session losing streak.

For base metals, the rising USD also pressured prices across the group. However, LME zinc prices bucked the trend, increasing by 0.26% to $2,858/ton due to a significant narrowing of market oversupply.

Specifically, according to the August supply-demand report by the International Lead and Zinc Study Group (ILZSG), the global zinc market surplus shrank to 8,700 tons in June, down from an adjusted surplus of 44,000 tons in May. In the first six months of this year, the global zinc market had a surplus of 228,000 tons, sharply down from 452,000 tons in the same period last year.

Additionally, supply disruption risks in China, which supplies more than half of the world’s refined zinc, also helped boost zinc buying in the market. According to Bloomberg, zinc smelters in China are discussing plans to cut production due to a shortage of ore supplies. Accordingly, the country’s zinc production is expected to continue declining this month after falling to a one-year low in July.

Soybean Prices Plunge Over 2% Due to US Bumper Crop Prospects

November soybean prices reversed and plunged by more than 2% in the August 22 trading session, ending a three-session winning streak. Although US export activity remains positive, the prospects of a bumper crop this year have overwhelmingly dominated the market.

The 2024 Crop Tour survey in the Midwest, a key US soybean-growing region, ended its third day with positive results. Specifically, the average number of soybean pods per 3x3 square feet in Illinois reached 1,419, higher than last year’s 1,270 and the three-year average of 1,266. Additionally, the number of soybean pods per 3x3 square feet in many areas of Iowa was generally higher than last year’s figures and the three-year average.

These two states are the largest soybean producers in the US, and the results indicate a positive outlook for the oilseed supply this year, putting significant pressure on prices.

Moreover, in yesterday’s Daily Export Sales report, the US Department of Agriculture (USDA) reported that exporters sold 198,000 tons of 2024-2025 soybeans to China. This marked the fourth consecutive session with large soybean orders sold to the Asian nation. Additionally, according to data from yesterday's Export Sales Report, the US sold 1.68 million tons of 2024-2025 soybeans in the week ending August 15, a 25% increase from the previous week and above market expectations. These figures indicate that demand for US soybeans is rising, partially narrowing the price decline.

The red color also dominated the price board for soybean products yesterday. December soybean meal prices fell 1.49% to $335/ton. Meanwhile, December soybean oil prices ended a four-session winning streak with a 1.52% decrease.

Source: MXV