Rice: Coastal Sales Brisk, Midsouth Quiet
With about 70% of the crop already sold, Texas had three public sales this week, totaling 132,328 cwts. Bidding was fairly wide, with buyers showing $9.50 per cwt premium over loan for conventional varieties and $9.25 over for hybrids.
Most of the rice was second crop, and these are strong prices for the ratoon harvest. Something around 56,000 cwts confirmed at prices bid, although in some cases the shipping terms had to be better to get the grower to sell.
Trading continues around those premiums. Last year’s crop sold out by the end of February, so it will be interesting to see the completion timing of selling this year’s crop.
Water for a full Texas 2014 rice crop continues to be a question mark. With about 2.5 months to the deadline, the upland lakes are still nearly 100,000 acre feet from the required minimums. Some good, heavy rains could take care of that, but if they are going to, they need to start coming on very soon.
Estimates are that south Louisiana is at least 75% sold. Bidding continues at the $25.00 per bbl fob farm level – basically where it has been since before harvest started. Only small lots are selling at present, unless the shipping terms are made more attractive to the grower.
We are told that much of the rice is actually paying out closer to $26.00 per bbl due to the excellent milling this year. With strong demand and a very tight crop, folks are wondering what prices will be like after the first of the year.
The Delta/Arkansas/Missouri region is reporting quiet markets, as they have all spent part of this week trying to thaw out after last week’s icy-blast cold front.
- Mississippi notes the market slow with an export bid of $15.56 per cwt delivered barge facility not drawing much attention. It is difficult to tell just what the local domestic miller is doing, but a good bit of rice has to be going in that direction.
- Arkansas is seeing some rice trade at the $7.00 to $7.05 level fob farm, but most growers are waiting patiently for bids of $7.25 or better picked up at the farm after the first of the year. It looks to us like this is as tight a year with as much varied competition for the available high quality long grain as we have ever seen – or at least since the mid-1970 to early-1980 period.
- Missouri is reporting bids around the $6.45 per bu delivered level, but that seems low to us. We have heard of some earlier trading closer to $7.00 delivered.
It looks to us like all farmers in the upriver region are looking for and expecting higher prices after the first of the year. And we think that if they are ever going to get them, this is the year for it. If too many acres are brought back into rice in the next crop year, prices will certainly slip – and may slip considerably.
We are told that many bankers are looking closely at this potential market dampener as well – and they should be.
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,