Agfax Buzz:
    October 12, 2013
    rice-cooled-07152013

    Rice Market Buoyed In U.S. By Big Iraqi Purchase

    AgFax.Com - Your Online Ag News Source

    From US Rice Producers Association's Rice Advocate

    Luckily, the government of Iraq was not shut down, and for the first time since 2010, US rice was sold to the Grain Board this week. A total of 40,000 metric tons was confirmed, along with 60,000 metric tons from South America for shipment by Dec 20.

    The news that the Grain Board of Iraq purchased rice only from the Western Hemisphere, and specifically from the US, was exactly what was needed to put a heart beat back in our market. ADM did 40,000 metric tons, with Uruguay and Argentine joint selling consortia each doing 30,000 tons.

    This is a bit smaller than Iraq’s usual monthly purchase of 120,000 tons, but it an excellent sign that quality is in demand, and that at least one buyer will pay a premium for quality. We believe that the US rice was sold at a $10.00 per ton premium to the South American, and at least a $200 per ton premium to current levels in Thailand or Vietnam.

    When reports of the sale surfaced in Chicago, the futures market went on a two day move higher, ending the week 24.5 cents better than the close last Friday.

    Due to the government shutdown, there was no export sales and shipment report this week. Export sales have been slow, but sales to Mexico, Central America and Haiti are in the works, and there are increasing inquiries even for medium grain.

    Also of positive note, Colombia concluded its recent sale of import quota (17,555 metric tons) under the US-Colombia Free Trade Agreement. Clearly, some parts of the industry bet on lower rough rice prices during harvest, and basically that has not happened. Buyers who can wait have been waiting, and many mills have already purchased a lot of rice.

    So until those domestic and foreign buyers are convinced that prices are not going lower, new sales will remain slow. However, time is not on the buyers’ side, and the Iraq purchase is, hopefully, the first signal of increased interest.

    Brazilian rough rice and Vietnamese milled rice are both being offered in Mexico, but are not receiving much interest. The stories of the smoky odor permeating Brazilian rough rice are now widespread, and Mexican buyers are wary.

    The Vietnamese rice that has been sold is being used for blenders, but the market niche for undermilled rice with extra damage and brokens is fairly small. But without a working government, we do not have the tally of officially reported new sales.

    Prices in Asia have changed very little during the week, with Thai 100% Grade B closing out Friday unchanged at $425 per ton fob vessel and parboiled at $435 per ton. Vietnam’s 5% milled long grain is reported stronger at $390 per ton. Pakistan’s 5% milled held at $390 per ton, with its parboiled still at $430 per ton. Indian 5% long grain was called $425 per ton, with its parboiled now at $410 per ton, both up $5 for the week.

    With decent volume and a continued growth in open interest, rice futures rose strongly on Wednesday but gave back some to close on Friday at $15.11-1/2 on the nearby Nov. This is 24-1/2 cents higher than last Friday, when it looked like the market would challenge the $14.50 level.

    The strong price rise Wednesday erased the oversold condition of the market, but there is little follow through to the upside. We see the Nov futures stuck in the 52-week range of $14.69 – $16.65. In any case, if trading this market, keep a clear head and use sound money management. The export news has been supportive but the problems with huge Asian stocks remain like a wet blanket over this market.

    Tags: , ,

    Leave a Reply

    Name and Email Address are required fields. Your email will not be published or shared with third parties.

    Agfax Rice News

    Missouri: Crop Budgets For Southeast Counties12-20

    Mississippi Crop Values to Top $7B for 3rd Straight Year12-19

    AFB Rice Close: Strong Gains to End the Week12-19

    Texas Ag Benefits from Normalized U.S.-Cuba Relations, Says Expert12-19

    Louisiana: Rice School Slated Jan. 9 at Abbeville12-19

    Keith Good: New Cuba Policy Could Open Huge Market for U.S. Wheat12-19

    Nitrogen Fertilizer: Oversupply, Geopolitical Risk Overshadow Strong Global Demand – DTN12-18

    AFB Rice Close: Mixed as Consolidation Continues12-18

    China Holds Grain Import Quotas Steady, Revises Application Process – DTN12-18

    Japan Elections Won’t Soften Trade Issues — DTN12-18

    Updated ARC-CO and PLC Payment Indicator for 2014 Crop Year12-18

    U.S. Drought Outlook: Improvement Expected Across California12-18

    Ag Trade Should Benefit from Thaw in U.S.-Cuba Relations12-18

    U.S. Energy: Heating Oil Expenditures Expected to Drop This Winter12-18

    Gasoline Prices: Decline in All Regions12-18

    Propane Stocks: Decrease by 0.8M Barrels12-18

    Diesel Prices: Average Drops 12 Cents12-18

    Keith Good: Viptera Corn Ban Lifted by China; Wheat Prices Soaring12-18

    AFB Rice Close: Higher in Narrow Range12-17

    Senate Passes Tax Extenders Bill with Key Provisions for Ag — DTN12-17

    Keith Good: EPA Moving Ahead with Plans to Finalize Clean Water Rule12-17

    DTN Fertilizer Outlook: Global Phosphorous Demand to Increase12-16

    Keith Good: Ag Industry Preparing to Launch New Biotech Seeds12-16

    Cash Rent Rates Key to Cropland Prices 2015 – DTN12-15

    AFB Rice Close: Higher but Within Friday’s Range12-15

    Drones: FAA Grants Trimble Inc. an Exemption to Use UX5 in Agriculture12-15

    Flint on Crops: Courage, Optimism Drive the Successful Farmer12-15

    Keith Good: U.S. Hay Exports to China Take Hit from GMO Crops Ban12-15

    AFB Rice Close: Futures Explode Upwards12-12

    Rice: California’s Drought Opens Opportunities In The South12-12

    Keith Good: World Cereal Production May Reach Record 2.5B Tonnes12-12

    AFB Rice Close: Futures Look to Re-Test Support12-11

    Keith Good: GMO Labeling Not Favored by Congress, Hearing Indicates12-11