According to data from the Vietnam Commodity Exchange (MXV), the global commodity market concluded the week of January 8-12 with relatively mixed and volatile movements. Agricultural products were predominantly in the red, while prices for many industrial and energy commodities increased. By the end of the week, the MXV-Index fell by 0.52% to 2,107 points. During the past week, investment flows were highly active, with an average daily trading value of about 5.2 trillion VND, 20% higher than the previous week.

Robusta Coffee Prices Return to 28-Year Highs

According to MXV, by the end of the trading week from January 8-14, the price board for industrial commodities was awash in green. Leading the pack was Robusta coffee, which increased by 5.15%, maintaining the highest price levels seen in 28 years. Concerns about supply shortages due to Red Sea conflicts were the most significant factor supporting prices last week.

Tensions in the Red Sea escalated with the involvement of the UK and the US, raising concerns about disruptions in the transportation of commodities, including Robusta coffee. Previously, analyst Natália Gandolphi noted that shipping rates on the Pacific route had increased by 56%. She also estimated that about 36% of coffee shipments from Asian countries like Vietnam and Indonesia would decrease in Q1 2024.

This heightened concern about Robusta supply shortages, especially following reports that Vietnamese farmers were limiting coffee sales.

Despite this, Vietnamese customs reported a 74% increase in coffee exports in December compared to the previous month, and a 5.4% increase compared to the same period in 2022. This data was more positive than the earlier estimates by the General Statistics Office at the end of last month.

Conversely, Arabica was the only industrial commodity to see a price drop, decreasing by 1.53%. Improving supply signals exerted significant pressure, causing prices to diverge from most other commodities in the group.

ICE-US certified Arabica stocks increased by 8,302 bags of 60kg each last week, bringing the total number of stored coffee bags to 261,446, moving away from the lowest levels in over 24 years.

Additionally, the market expects Brazil and other countries to boost coffee exports amid transportation issues in Asian countries. In December, Brazil exported 4.06 million bags of green coffee, a 33% increase compared to the same period in 2022. Previously, the Honduran Coffee Institute (IHCAFE) reported that Honduras, the fourth-largest Arabica producer, exported 254,923 bags of 60kg each in December, a 30% increase year-on-year.

Soybean Prices Decline for Four Consecutive Weeks

With declines in three out of five sessions, March soybean futures ended the week with a decrease of over 2%, marking the fourth consecutive week of decline. The supply outlook in major producing countries has pressured prices. Notably, the USDA's World Agricultural Supply and Demand Estimates (WASDE) report released last weekend confirmed increased U.S. supply, reinforcing selling pressure.

Last week, the Rosario Grain Exchange (BCR) raised its 23/24 soybean production forecast for Argentina to 52 million tons, up 2 million tons from the previous estimate. Favorable weather conditions since November last year have led to more optimistic expectations for this year's crop. Furthermore, weather forecasts indicate that Argentina's key agricultural areas will receive moderate rainfall and mild temperatures in January, supporting crop development.

In the WASDE report, the most notable change was the end-of-season 23/24 U.S. soybean stocks forecast. The USDA projected stocks at 280 million bushels, higher than the 245 million bushels in the December report and surpassing the average market expectations. This resulted from an increase in U.S. soybean yield for the 23/24 season to 50.6 bushels per acre, exceeding market expectations and boosting production.

Soybean meal and oil experienced divergent trends last week. Under pressure from falling soybean prices and favorable crop prospects in Argentina, March soybean meal futures fell by nearly 2%, marking the eighth consecutive week of decline. The price drop was somewhat mitigated by technical buying in the final session of the week. Meanwhile, March soybean oil futures increased by nearly 2%, ending a three-week losing streak. The rise in palm oil and crude oil prices spurred buying interest in soybean oil.

On the domestic market, as of the morning of January 12, imported South American corn prices at Vietnamese ports recorded a slight increase. At Cai Lan port, South American corn for January delivery was priced around 6,550 - 6,700 VND/kg. For Q2 delivery, the asking price ranged from 6,650 to 6,700 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