Cocoa prices fall 7% on profit-taking pressure

Closing yesterday's trading session, cocoa prices led the decline with a loss of 7%. Analysts said the main reason was profit-taking by speculators.

According to the Vietnam Commodity Exchange (MXV), the world raw material market was divided in the first trading session after the Christmas holiday (December 26). At the close, the MXV-Index increased by 0.91% to 2,194 points. Notably, 5 out of 7 agricultural products increased in price, notably soybean meal, soybeans and wheat. On the contrary, the prices of industrial raw materials weakened, of which cocoa recorded a sharp drop of nearly 7%.

Thị trường hàng hóa hôm nay 27/12: Giá ca cao giảm 7% do áp lực chốt lời

MXV-Index

Soybean market rebounds after holiday

Buying pressure dominated the agricultural markets as they reopened after the Christmas holiday. Soybeans and soybean meal were the standouts, rising 1% and 4.37%, respectively. Concerns about drought in Argentina, a fire at a Bunge soybean processing plant in Cairo (USA) and hedge fund short-selling activities supported prices in yesterday's trading session.

Agricultural product price list

According to weather forecasts in South America, the drought in Argentina will continue into the new year, with limited rainfall in early January. Meanwhile, Brazil has received abundant rain, ensuring favorable conditions for the crop. This has raised concerns that the current crop year's soybean meal supply will not be as high as previously expected.

Yesterday, in Cairo, a major fire broke out at the Bunge grain processing plant. The fire is now under control, but the time of resumption of operations is still unknown. This factor also contributed to supporting soybean meal prices, indirectly positively affecting soybean prices.

In the domestic market, on December 26, the offer price of South American soybean meal to Vietnamese ports was relatively stable. At Vung Tau port, the offer price of soybean meal for delivery in February 2025 was VND 10,300/kg, while the March 2025 delivery also fluctuated at VND 10,300/kg. At Cai Lan port, the offer price was about VND 150/kg higher than at Vung Tau port.

Wheat also rose more than 1% after the holiday on supply concerns. Temperatures are forecast to be above normal across much of the U.S. over the next 10 days, along with heavy rainfall, which could be a concern if the ground is not covered with enough snow when temperatures drop to normal and below normal.

According to the Russian Association of Grain Exporters and Producers, Russia's grain export potential in 2025 is forecast at 45 million tons, including 40 million tons of wheat. This forecast includes export volumes in the second half of the 2024-25 season (when exports are limited by government quotas to increase domestic supplies) and the first half of the 2025-26 season, when quotas are not applied.

Cocoa prices fall 7% on profit-taking pressure

Industrial raw materials closed down across the board yesterday, while Robusta coffee and white sugar were closed. Intercontinental Exchange (ICE-US) commodities opened late.

Industrial raw material price list

Cocoa prices led the decline, falling 7% in yesterday's session. Analysts said the main reason was profit-taking by speculators after the Christmas holidays. However, the market still worries about supply in the first months of 2025.

Cocoa farmers in Ivory Coast are concerned about production in early 2025 due to the impact of strong dry monsoons in the main producing areas. Strong Harmattan winds combined with low rainfall have dried out cocoa leaves, weakening the trees and affecting production. The areas most affected are the Daloa Central West, Yamoussoukro Central and Bongouanou Central, where there has been virtually no rain.

According to cocoa exporters in Ivory Coast, the amount of cocoa arriving from October 1 to December 22 reached 972,000 tons, up 30% compared to the same period last year. However, this increase is due to a sharp decline in production and exports in the previous crop year 2023-2024. In fact, compared to normal crops, the amount of cocoa arriving at the port is still low.

Following cocoa, Arabica coffee prices fell 1.2% due to profit-taking pressure and the prospect of oversupply next year. According to the US Department of Agriculture (USDA), global coffee supply and demand in the 2024-2025 crop year will have a surplus of 6.78 million 60-kg bags, up 21.07% from the June forecast and the largest surplus in the past four years. USDA also estimates that global coffee trade will have a surplus of 8.26 million bags in the 2024-2025 crop year, 2.2 times higher than the previous forecast but 1.29 million bags lower than the 2023-2024 crop year. Of which, exports are expected to reach 144.9 million bags and imports 136.6 million bags.

Prices of some other goods