While the prices of 6 out of 7 agricultural products increased sharply, the entire energy market was covered in red. At the close, selling pressure prevailed, pulling the MXV-Index down slightly by 0.04% to 2,134 points.

Agricultural market recovers, strong purchasing power

At the end of the last trading week, the agricultural market recovered, with prices of most commodities (except rough rice) increasing sharply by about 2.5 – 6%. Notably, after falling to a 4-year low at the beginning of the week, corn prices almost continuously increased, ending the week up 1.97%, ending a 4-week streak of consecutive declines. Positive US export results for the new crop year were the main factor driving the price increase.

Data from the Export Sales Report showed that US corn sales for the 2024-2025 crop year in the week ending August 22 reached 1.49 million tonnes, up 15.7% from a week earlier and exceeding the market’s previous forecast range of 700,000 tonnes to 1.4 million tonnes. This is also the highest weekly corn sales volume ever recorded in the 2024-2025 crop year. This shows that when US corn prices fell, many importers took advantage of the situation to buy.

Concerns about the U.S. crop also supported corn prices last week. In its Crop Progress Report, the U.S. Department of Agriculture (USDA) said about 65% of the country’s corn acreage was good/excellent in the week ending August 22, down 2 percentage points from a week earlier and below the market’s expectation of 66%. This figure reflects the impact of recent droughts on crops.

In line with corn, wheat prices also rebounded strongly after falling to their lowest level since late 2020 earlier this week. Positive export results from the US and the possibility of a tightening of supply from Europe were the main bullish factors.

In its Export Sales report, the USDA said the United States sold nearly 532,080 tonnes of 2024-25 wheat in the week ended August 22, up 8% from a week earlier and near the top of analysts’ forecast range of 300,000 to 600,000 tonnes.

In addition, the European Commission (EC) has lowered its forecast for EU soft wheat exports in 2024-25 to 26 million tonnes, a sharp decline from its July estimate and that of 2023-24. The main reason is that crops in major producing countries such as France and Germany have been damaged, leading to a sharp decline in output.

Oil prices weaken after OPEC signals it will lift production cuts

According to MXV, at the end of the trading week of September 26-1, the energy market was on fire when the prices of 5/5 commodities lost 1-2%. In particular, oil prices turned to weaken after sources said that OPEC may gradually lift the production cut policy from October, in addition to the expectation that Libya’s production activities will recover.

At the end of the week, WTI oil price decreased by 1.71% to 73.55 USD/barrel, Brent crude oil decreased by 1.56% to 76.93 USD/barrel.

According to a reliable source of Reuters, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are likely to start easing their production cuts in October. Thus, if OPEC+ increases production from this time, the additional supply will likely offset most of the recent oil production loss of the group’s member, Libya.

In addition, Libya’s Sarir, Messla and Nafoura oil fields said over the weekend they had received instructions to resume production, following a standoff between political factions. Libya had previously lost about 700,000 barrels of oil per day due to the shutdown of most of its oil fields. Expectations of a gradual restoration of supply have put pressure on oil prices.

Recovering export supplies from Russia also weighed on the market last week. Russia’s seaborne crude exports rose to their highest level in nearly two months, helped by a resumption of shipments from the Sakhalin project. The country’s four-week average of crude exports rose to 3.26 million barrels per day (bpd) in the week to August 25, up 60,000 bpd from the previous period. On a weekly basis, Russia’s seaborne exports rose 390,000 bpd to 3.35 million bpd, the highest in three weeks.

Pressure on US inventories also contributed to the market decline. According to a report from the US Energy Information Administration (EIA), US commercial crude oil inventories fell by 846,000 barrels in the week ending August 23, a decrease lower than the market’s expectation of a decrease of 2.3 million barrels.