Corn and wheat prices weakened simultaneously.

Commodity market today September 20: MXV-Index extends its increasing streak to the 7th session Commodity market today September 24: Coffee and agricultural product prices turn to increase strongly

The Vietnam Commodity Exchange (MXV) said that buying power continued to dominate the world raw material market yesterday (September 24), pushing the MXV-Index up more than 1.5% to 2,203 points. Notably, prices of all metal products increased sharply after China launched the largest economic stimulus package since the Covid-19 pandemic and tensions in the Middle East escalated. Going against the trend of commodity groups, many agricultural products such as corn and wheat turned to weaken after a positive trading session at the beginning of the week.

MXV-Index

Metal prices increased across the board

At the end of the trading day on September 24, all metal products increased in price thanks to the support of macro factors, especially China's economic stimulus. For precious metals, silver and platinum prices both recovered with increases of 4.33% and 2.69%, closing at 32.43 USD/ounce and 987.7 USD/ounce, respectively.

Metal price list

Money continued to flow into precious metals as markets reacted to the US Federal Reserve’s 50 basis point interest rate cut last week. Silver and platinum extended recent gains as escalating tensions in the Middle East drove investors to safe havens. Fears of a new conflict involving Iran were heightened after Israel targeted Hezbollah positions in southern Lebanon.

For base metals, commodities in the group rose sharply following the economic stimulus move by China, the world's largest consumer of industrial metals. The most notable development was the 3.31% increase in COMEX copper prices to $9,902/ton. This was the highest closing price in more than two months. Iron ore prices also recovered from a one-year low thanks to a 5.9% increase to $94.74/ton.

Specifically, yesterday morning, the People's Bank of China (PBOC) announced plans to launch the largest and most important economic stimulus package since the Covid-19 pandemic, the latest move by the Chinese government to revive the weak economy.

The stimulus package includes a 50 basis point cut in the reserve requirement ratio (RRR), a 20-30 basis point cut in the medium-term lending facility (MLF) and loan prime rate (LPR), among other interest rates. The PBOC also announced a package to support the crisis-hit property market, including cutting borrowing costs by up to $5.3 trillion for mortgages and easing regulations on second-home purchases.

Although the country's policymakers announced the stimulus package later than the market expected, this is still considered a good signal to help restore people's confidence, thereby helping the economy escape deflation and regain growth momentum soon. Thanks to that, the price of copper or iron ore, commodities that are sensitive to China's economic stimulus, increased sharply from yesterday morning and closed the session with a strong increase.

Corn and wheat prices weakened simultaneously.

December corn futures traded sideways on September 24, closing down slightly by 0.42%. On the one hand, sellers were encouraged by positive crop conditions in the US. On the other hand, corn prices still received support from the country's positive export results in the delivery report earlier this week.

Agricultural product price list

In its Crop Progress report yesterday, the US Department of Agriculture (USDA) said that last week, the percentage of corn that was good/excellent quality was 65%, unchanged from a week ago and higher than the market expectation of 64%. In addition, harvesting activities were also accelerated, with about 14% of the area completed as of September 22, lower than the 17% forecast by analysts, but still higher than historical data. The above data shows that the US crop is still going well and putting great pressure on corn prices.

Similar to corn, December wheat futures also saw strong swings yesterday, with sellers gaining the upper hand, closing down 0.77%. The selling pressure on wheat was mainly driven by profit-taking amid the lackluster outlook for supply from the Black Sea region.

According to Crop Progress data, 96% of the U.S. spring wheat crop had been harvested as of September 22, up 4 percentage points from a week ago and above the 95% forecast. For winter wheat, planting is picking up, with about 25% of the projected area completed, up 11 percentage points from a week ago but still below the market expectation of 27%. Overall, the U.S. wheat crop is still progressing well, which is contributing to the pressure on prices.

Meanwhile, extreme weather in Russia is worsening the outlook for this year’s grain output and disrupting plantings, helping to support wheat prices. Heavy rains have left large areas of farmland waterlogged and production has been hampered.

Prices of some other goods