Below is the analysis of market movements of some raw materials (Agricultural Products, Industrial Materials, Metals, Energy) globally in the trading session on August 30, 2021.
Hurricane Ida is making landfall in the Gulf of Mexico and moving inland, which could hinder US import and export activities.
Corn price opening at the beginning of the week is showing positive signals as the information is biased towards support. This week, while the impact of “bullish” factors will still prevail, corn prices may head towards the upper boundary of the 575 horizontal range. However, the price will still be hard to break. resistance but still fluctuates within a narrow margin because new information only affects in the short term and the supply-demand balance in general has not changed and the difference is significant.
For the US crop, weather is still the strongest factor affecting supply. Hurricane Ida remains a short-term concern for the pre-harvest corn crop in the Delta. Although it has weakened from a Category 4 storm to a Category 2 storm, with the storm spreading further north, strong winds and continued flash flooding, it is likely to negatively affect maize crops and reduce corn quality after harvest. The states of Arkansas, Mississippi, Alabama and Louisiana are directly affected by the storm, although they only account for a low percentage of production compared to the whole country, but also raise concerns about US supply and import and export activities. This will still be a support factor for corn prices unable to fall below the sideways zone in the next few days.
Green remained in the coffee market for all five sessions of last week, boosting Arabica prices by nearly 6% to 192.2 cents/lb to a two-week high. Notably, Robusta price broke through more than 7% to 2018 USD/ton, the highest level within 4 years.
Concerns about the supply chain of Robusta coffee and complicated disease developments in Vietnam and Indonesia were two factors that supported prices throughout the last recovery cycle, from 1745 USD/ton. The Arabica market also benefited from this increase in Robusta prices. The Brazilian company Red Container estimates that not only the output of the 2022/23 crop year will be affected by frost and drought, but the output of the following crop year 2023/24 will also inevitably suffer losses, which will cause losses. for some small coffee farmers to switch to growing soybeans. The Delta variant is spreading strongly in major markets such as Europe and the US, causing coffee demand to be reduced. Opentable’s latest statistics also show that the number of visitors to restaurants in the US tends to decrease from the end of July until now. However, the market still expects that consumption demand will recover strongly after the Covid-19 pandemic, so news related to supply has not stopped supporting prices to go up.
Ending the week, metal products simultaneously recovered before the weakening of the USD. Silver rose 4.1% to $24.06 an ounce, Platinum rose 1.2% to $1006.5 an ounce. The Dollar Index plummeted 0.84% to 92.68 points.
The continuous increase in employment data made investors wait for a breakthrough announcement from the Fed, however, at the Jackson Hole meeting, Fed Chairman Jerome Powell gave no further signs of monetary tightening. new, and low interest rates will remain in place. Investors’ sentiment became more comfortable after being focused for a week, driving strong buying in both Silver and Platinum markets in the Friday session.
Currently, the possibility that the Fed will raise interest rates this year is not high, because the labor market is still recovering and unstable. At the same time, President Biden is implementing accommodative fiscal policies and will have a decision to appoint a Fed chair early next year. Therefore, Mr. Powell will also not want to cause any policy contradictions for the White House, as well as cause extreme volatility in the market.
This week, investors will turn their attention to two jobs reports, the ADP Nonfarm Employment Change Report, and the US Department of Labor’s August Nonfarm Payrolls. In August, the US was severely affected by the strong spread of the Delta variant, so this month’s employment data may weaken and negatively affect the value of the greenback. Accordingly, metal prices will benefit.
Oil prices rebounded last week with WTI up 10.62% to 68.74 USD/week, Brent price up 11.54% to 72.7 USD/barrel. However, this increase was only enough to make the price recover after the previous series of deep declines.
This week will be an important time to determine if the price can create an upward momentum or will be pushed back below the area of 65-66 USD/barrel. There are two important factors in the coming days, the first is the OPEC+ meeting on September 1 and the second is the macroeconomic indicators in the US, especially the information of the labor market, when Hurricane Ida – one of the main drivers of prices in previous sessions – has waned and eased concerns about supply disruptions..
Most analysts are inclined to predict that OPEC + will not change the policy and the roadmap to increase output outlined since July, especially when the parties have gone through many diplomatic struggles to come up with a suitable plan. with the parties. Moderately increasing production, preventing oversupply while ensuring export price advantages will help members gain market share, especially in Asia.
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