Midsouth And Texas Rice Sales Stall
Occasional showers and cooler temperatures continue to slow the harvest in the Delta/Arkansas region this week. We believe that harvesting is 67-70% done. Most growers are pleased with average or better yields and good quality.
Barge trade remains sporadic, mainly because growers are asking $6.90-$7.25 per bu ($15.30-$16.10 per cwt) and buyers are attempting to bid at $0.70 under the Nov futures for nearby rice, and up to $1.70 under the Jan or Mar for deferred positions.
The gap between the numbers starting with a 13 and those beginning with a 16 is too wide to bridge at the moment. In all of the long grain area, we believe that between 30% and 65% of the new harvest has already been contracted, which radically diminishes the incentive to move cash rice today — from both sides.
Sales of rough rice in Texas nearly stopped, as the single buyer dropped their bid to $9.50 (conventional) and $9.00 over loan (hybrids). There was one sale this week, with zero confirmations. We continue to believe that it will take $10.00 over loan to begin the next cycle of sales.
South Louisiana continues to see quiet bidding at $25.00 per bbl FOB farm, although the mills are out to Jan/Feb for shipment. Second crop harvest should begin within two weeks in Louisiana and three weeks in Texas, and weather permitting be largely finished by the middle of November.