Arabica coffee drops 7 days in a row
The September contract Arabica price marked the 9th consecutive decline, closing yesterday at 7% lower than the reference. MXV said that the market still has a positive view on coffee production and exports in Brazil.
According to experts, Brazil will export a larger amount of coffee in the second half of 2023 when the supply is available after the harvest period, partly offsetting the low export volume in the first 6 months and contributing to ensure sufficient supply globally.
In addition, in a survey by Reuters, experts agreed that coffee production in the 2023/24 crop year in Brazil had an increase over the previous crop year, pulling the global supply-demand balance to a surplus. a surplus of nearly 1 million bags, a sharp increase compared to the deficit of 3,4 million bags of the previous crop year. Furthermore, analysts also expect coffee supplies for coffee year 2024/25 to increase sharply to 69,8 million 60kg bags, close to the record 69,9 million bags set by the US Department of Agriculture (USDA). ) for the 2020/21 crop year.
Moving in the same direction, Robusta price fell for the third consecutive session with a decrease of 3% compared to the reference. In the current context, analysts estimate that Robusta prices are unlikely to continue to remain at the current high levels.
Also in the survey conducted by Reuters, analysts said that El Nino will cause adverse weather in the main coffee growing regions in Asia, leading to lower production, but boosting the Exports in Brazil at the moment will bring the price down to 2.300 USD/ton by the end of this year.
This morning on the domestic market, the price of green coffee beans in the Central Highlands and Southern provinces continued to drop sharply by 1.000 VND/kg, bringing the purchase price of domestic coffee down to about 63.900-64.7000 VND/kg. Thus, the domestic coffee price has decreased continuously in the past 1 week, with a total decrease of up to 3.700 VND/kg.
WTI oil lost 80 USD/barrel
According to MXV, concerns about macro conditions in the world's two largest economies, the US and China, temporarily outweighed supply risks, dragging oil prices to extend their decline to a third consecutive session. . Ending the trading session on August 3, WTI oil price lost the mark of 15 USD/barrel after dropping nearly 8%, closing the session at 80 USD/barrel. Brent oil price fell 2% to 79,38 USD/barrel.
Last night, according to Vietnam time, the Federal Open Market Committee (FOMC) announced the Minutes of the interest rate meeting on July 26. Although there are some mixed views about the plan to raise interest rates of the US Federal Reserve (FED); however, the Minutes notes that “Most participants continue to see significant upside risks to inflation, which may necessitate further tightening of monetary policy.”
After the Minutes was published, the USD appreciated, bond yields increased and risky markets such as stocks declined, reflecting investors' cautious sentiment in the context that interest rates are still likely to increase. , or anchored high for long periods of time.
The Fed Watch tracker shows the odds that the Fed will raise rates by 25 basis points at its September meeting increased from 9% to more than 10%. This also weighed on oil prices during the session, despite data from the US Energy Information Administration (EIA) reporting a drop in inventories.
Specifically, the EIA said that US commercial crude oil inventories fell by nearly 6 million barrels in the week ended August 11, pretty close to data from the American Petroleum Institute (API) earlier. U.S. crude exports rebounded sharply last week, while imports continued to remain high, reflecting increased domestic and world demand for U.S. oil.
However, US oil production also continued to increase sharply by 100.000 bpd last week, reaching 12,7 million bpd, the highest level since the end of March 3. This contributes to make up for the shortfall in the market and promotes selling in the market.
Besides, diplomatic relations between the US and Iran have achieved a few small breakthroughs, raising the expectation that a part of crude oil from Iran can return to the market after a long period of sanctions.
