Rice Market: Crop Better in Texas; 2 Weeks Late in Delta
USDA took back some of the increase it made last week and dropped WMP factors by 9 cents on both long grain rough and medium/short grain rough. This change moved the on-farm WMP value of long grain rough to $12.18 per cwt.
Rice futures fell constantly during the week from last Friday’s settlement in the nearby July at 16.505 to this Friday’s close at 15.91. The easing was steady but there were a lot of buyers under the market to absorb whatever was being offered, and a couple of attempts to get a freefall going failed. Heavy rolling from the July into both the Sep and Nov positions was noted on good volume and easing open interest.
The short sellers don’t seem to be as keen to hit the market as they have been over the last several months. This could be due to the continuous cancellation of warehouse certificates in Chicago, now down to only 1,623 available for delivery , or it could mean that they are keeping their powder dry while waiting for the right opportunity. It’s a tricky game they are playing and a tricky market, too. If trading rice futures or any other futures markets, do so carefully and calmly. In other markets, the Dow finished at 14799.40, the Euro was at 1.3146 against the Dollar, and nearby crude oil futures ended the week at 93.89 per bbl. July grains and cotton ended the week with corn at 6.61-3/4, soybeans at 14.93-1/4, wheat at 6.98, and cotton at 85.32.
Not unexpectedly, net export sales posted this week were 34,900 tons. This was no surprise, and in fact, the tonnage sold is really better than seen at this time of year is seasons past. At some point, we will hit the bottom of the barrel – although we don’t think we are quite there just yet. Long grain sales were light this week, with Honduras taking 2,900 tons of rough, while Colombia took 5,900 tons, Saudi Arabia 1,600 tons (parboiled), Mexico 1,300 tons, and Canada 1,000 tons – all milled. Medium/short grain rough led the pack with 19,500 tons sold to the Netherlands (13,500 tons) and Mexico (6,000 tons). South Korea bought 3,100 tons of medium/short brown, and of the 3,000 tons of milled, Canada bought 1,300 tons and New Zealand bought 400 tons.
Physical exports for the week came in at 51,300 tons and were heavy on long grain rough, of which Mexico loaded out 24,600 tons, El Salvador 5,300 tons, and Colombia 4,300 tons. Long grain brown and milled moved 11,400 tons, with 5,900 tons going to Colombia, 3,100 tons to Saudi Arabia, 1,800 tons (brown included) loaded for Canada. Medium/short rough lifted 700 tons to Mexico, while milled saw 1,600 tons go to New Zealand, 1,000 tons to South Korea, and 600 tons each load for Japan and Jordan.
Texas and Louisiana
It’s fairly quiet in the countryside, as most producers are now watching their crops and waiting to see just how the extended cold and/or wet weather affects the final outcome. Reports from Texas note the crop looking better in many areas. The rains that have come in the last week or so have been beneficial, and the clear weather now is a help with flowering taking place. Even though there are still thin stands being noted, there is a bit of optimism being heard with regard to the overall crop and its potential for good quality when harvested.
We have not heard of an active bid at present, but we understand that some new crop rice traded during the week at $10.25 per cwt over loan fob farm. This trade was for non-hybrid only, whereas the earlier big chunk of buying was without variety restrictions. South Louisiana is in a similar position as Texas, but the notes of optimism are not quite as prevalent. Lots of thin fields and duck damage continue to worry local observers. The crop is improving with the good weather, but harvest will still be three to four weeks later than normal. New crop bidding continues at $25.00 per bbl fob farm or $25.50 per bbl delivered mill.
Arkansas and Mississippi
The Delta/Arkansas region is seeing improvements in the rice, with the weather being more cooperative now. We are told that there is lots of corn this year and that it is looking really good. Much of that corn has displaced rice, however, and the talk of big losses of rice acres continues to be a subject of speculation. We hear estimates of 30,000 to 35,000 acres down from last year in Mississippi and of at least 200,000 down in Arkansas. These are big numbers, and there is no way for them to be overcome by any small bits of late planting that might be occurring.
The crop is late here, too, but we understand by only about two weeks. The delayed start and extended cold and wet conditions are expected to affect field yields, and not in a positive way. There is little in the way of old crop left in first hands – from what we hear only small lots, if any at all. Mississippi buyers would pay $16.85 per cwt delivered barge facility if offered, and we hear Arkansas buyers would pay something near $7.00+ per bu fob farm – more when the futures recover to the upside. We are told new crop bidding in Mississippi is running at a dollar under the Jan futures for Oct/Nov/Dec delivery to a loading facility. Arkansas has been indicating a new crop price around $7.00 per bu delivered, but we are hearing that growers are looking for something better in light of the expense of this year’s production.
Prices in Asia finished the week mixed to softer, with Thai 100% Grade B easing further to $495 per metric ton fob vessel and Thai parboiled slipping to $550 per ton. Viet 5% long grain held its range between $365 and $380 per ton. Pakistan’s 5% long grain was unchanged at $458 per ton, with the last quote on parboiled at $450 per ton. India’s prices remained firm with 5% milled long grain at $445 per ton and parboiled at $430 per ton.
The ICE Dec and Mar contracts gave back 160 and 87 points on the week, respectively, as last week’s inversion between the two contracts gave way to partial carry. Well,