Oversupply pressure continued to weigh on agricultural commodities, pushing CBOT wheat prices to new lows amid increased exports from Russia and the Southern Hemisphere. On the other hand, iron ore recovered more than 1% after two sessions of weakness thanks to signs of a short-term shortage in China.
Pressure from Russia pushes wheat prices down
Yesterday’s session saw red covering all 7 agricultural products. Of which, Chicago wheat prices recorded the sharpest decline when they lost nearly 1%, pushing the price of this commodity back to the mark of 191.9 USD/ton.
According to the Vietnam Commodity Exchange (MXV), the main reason for the sharp drop in wheat prices yesterday was mainly due to the sharp drop in Russian wheat export prices along with concerns about the prospect of abundant supply.
According to consultancy IKAR, the price of Russian wheat with 12.5% protein content for delivery in late December - early January fell to $228 per ton over the weekend. IKAR also estimated that wheat exports from Russia in November will reach about 5.2 - 5.4 million tons.
Meanwhile, SovEcon forecasts 4.7 million tonnes, up 100,000 tonnes from its previous estimate. Thanks to record yields in Siberia, SovEcon also revised up its forecast for Russia's 2025 wheat production by 0.8 million tonnes to 88.6 million tonnes. The company also released its first forecast for the 2026 crop, with production estimated at 83.8 million tonnes and possibly as high as 87.9 million tonnes in an optimistic scenario.
At the same time, wheat supplies from Russia and the Black Sea region are also receiving support signals from positive developments in Russia-Ukraine peace negotiations. A ceasefire agreement will contribute to ensuring security for this strategic export route.
Besides Russia, two other major suppliers, Argentina and Australia, also recorded significant increases in production. According to the Buenos Aires Grains Exchange, the wheat harvest in Argentina is 20.3% advanced with higher-than-average yields, pushing the estimated output to a record 24 million tonnes.
The Grain Industry Association of Western Australia (GIWA) has also revised up its 2025-26 wheat production forecast by 420,000 tonnes to 13.1 million tonnes. This is 3.7 million tonnes higher than the initial forecast released in July, further reinforcing expectations of a bumper crop in Australia.
Iron ore prices reverse to recover
On the other hand, the metal market yesterday recorded overwhelming buying power with 8 out of 10 commodities closing in the green. The market focus was on iron ore as the price of this commodity reversed and recovered yesterday, ending the previous two consecutive sessions of decline.
Specifically, iron ore prices recovered more than 1% to 105.03 USD/ton - the highest level since the beginning of the month.
Iron ore prices recorded a surprise recovery as concerns about supply shortages in China - the world's number one steel producer - increased. The cause stemmed from the deadlock in contract negotiations between China Mineral Resources Group (CMRG) and mining group BHP, which led CMRG to issue a directive to stop buying BHP's Jingbao fines in the entire domestic market, including the shipment circulating at ports.
This is not the first time this boycott has taken place. In September, CMRG made a similar move on Jimblebar fines when negotiations stalled. The repeat shows the deep tension in iron ore pricing between the global supplier and the world's largest buyer.
BHP is a major player in the Chinese market, accounting for more than half of the group’s total iron ore exports, or about 160 million tonnes a year, according to data from RBC Capital Markets. With China importing 1.2 billion tonnes of iron ore last year, BHP has about a 13% share of the import market – a position that is enough to influence the entire market.
However, these price support signals seem to be insufficient to withstand the isolated pressure from the supply side. According to SteelHome, iron ore inventories at Chinese ports in the week of November 21 just reached the highest level since March at 139.6 million tons. With CMRG's boycott, this huge inventory will be difficult to push out in the short term, continuing to put pressure on prices.
Meanwhile, the Simandou mine (Guinea) just exported its first batch of iron ore in November. With a designed capacity of about 120 million tons/year and 75% of output held by Chinese enterprises, Simandou is expected to significantly add to the iron ore supply to China, thereby likely quickly alleviating current shortage concerns in the medium and long term.
Returning to the Vietnamese market, in the context of complicated fluctuations in world raw material prices with no clear trend in the past 3 months, domestic construction steel prices have remained stable since September until now, mainly thanks to support from domestic demand. Entering the end of the year, steel consumption will be enhanced by infrastructure projects in the final stages of completion, aiming to achieve the goal of completing more than 3,000 km of expressways and over 1,700 km of coastal roads to put into operation by 2025.
According to records on the morning of November 25, the price of CB240 coil steel was at 13.5 million VND/ton, while D10 CB300 rebar steel fluctuated around 13.09 million VND/ton.
Source: https://baotintuc.vn/thi-truong-tien-te/dien-bien-trai-chieu-cung-cau-tiep-tuc-chi-phoi-gia-hang-hoa-20251125100537319.htm
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