Rice Market: Export Sales Probably Light
Even though the government says it’s officially back to work, there are still no World Market Price, Export Sales or Export Shipment reports coming out for agriculture most likely until next week or the next.
The regular monthly reports will probably be back on schedule in November, but USDA has already announced that there will be no October reports.
As far as export sales are concerned, they still look light to us, with the exception, of course, of the 40,000 tons of long grain milled sold to Iraq (so good to see them back buying US rice after such a long absence) and the 17,555 tons of long grain sold to Colombia under the TRQ arrangement.
Even if it turns out to be correct that export sales over the last few weeks have been light, we believe that milled buying from Mexico and Central America will pick as the year moves forward.
Exports are indeed very important to US long grain rice, but with such a tight crop this year, the domestic buyers will most likely be the sector to set the pace in obtaining stocks to run all year and into new crop in 2014.
Prices in Asia just keep bumping along at fairly low price levels.
Thai 100% Grade B eased slightly from last Friday to be quoted at $420 per ton fob vessel this Friday, with Thai parboiled holding at $435 per ton.
Viet 5% long grain milled was somewhat stronger at $400 per ton.
Pakistan was on holiday late in the week, but the last quotes from that market were $385 per ton for 5% milled and $425 per ton for parboiled.
India closed out the week with its 5% long grain milled at $420 per ton and its parboiled at $410 per ton, up by $5 from last Friday.
From last Friday’s settlement in the nearby Nov at 15.115, rice futures made a nice run to a high of 15.525 during the week.
It seems to be running into some technical resistance around this level, and that brought in some selling on Friday to settle the market at 15.29, down 16 on the day, but still up 7.5 cents on the week.
There was some substantial short covering during the week, and we suspect more of that will be seen next week – or until prices get closer to the upper range of the Bollinger Bands. With more rolling from the Nov into the Jan to be seen next week, it will be interesting to see just how the hedge funds’ speculative mindset works with the fundamentals of US long grain.