Rice Market: Disappointment Over Iraqi Refusal Pushed Futures Sideways

This Week

USDA lowered the World Market Price factors for the second week in a row – this week by 10 cents on both long grain and medium/short grain.  The on-farm value of long grain rough drops to $11.43 per cwt.

rice-freshly-harvested-03172014-facebookRice futures’ sideways movement turned up this week but maintained a lateral, up-and-down pattern at higher numbers.  Volume was relatively light all week, and after making a new nearby high at 15.60 in the morning, Friday left the nearby May contract settled at 15.425, up 7 cents from the previous Friday’s settlement.

No doubt the market was disappointed by the insulting refusal of the Iraqis to buy at least 30,000 tons of US long grain on the most recent tender at a difference of only 5.7 cents – that’s correct, 5.7 cents per 100 lbs on the milled rice price.  But even with that, it looks to us like the most recent technical pattern has not yet been completed to the upside.

We’ll know more at this time next week.  In the meantime, we continue to recommend caution if shorting this market as well as care if trading rice or any other futures markets.  In other markets the Dow was at 16302.77, the Euro was at 1.3792 against the Dollar, and nearby crude oil futures were at 99.55 per bbl.  Grains settled the week with May corn at 4.79, May soybeans at 14.08-3/4, May wheat at 6.93-1/4, and May cotton at 93.31.

Exports

The numbers were big this week, with net export sales postings coming in at 118,900 metric tons for the current marketing year and another 49,400 tons for Mexico reported for the 2014/15 marketing year.  The nearby sales were great, and assuming the new crop report is correct, that’s a good long grain rough start to the new year, particularly so since this is the middle of March.

This week’s report was very heavy on long grain, with Mexico, El Salvador, Guatemala, Honduras, and an unknown destination taking a total of 60,700 tons.  long grain milled and brown sales totaled 42,200 tons, with Haiti and Saudi Arabia (parboiled) taking 39,300 tons between, followed by Canada at 1,100 tons (500 tons milled and 600 tons brown), and Costa Rica with 300 tons.  Medium/short grain sales were light this week, with 500 tons of rough sold to Mexico, 100 tons of brown sold to Jordan, and 15,500 tons of milled taken primarily by Japan (13,600 tons), Israel (700 tons), and Canada (400 tons)

Export shipments were also substantial at 78,500 tons.  Long grain rough to Honduras, Guatemala, and Mexico totaled 23,500 tons.  Long grain milled and brown grossed 48,900 tons, with Iraq loading out 29,700 tons, Haiti 14,300 tons, Canada 1,800 tons milled and 600 tons brown, and Mexico 1,400 tons.  Medium/short milled and brown consignments were light at 6,300 tons, with Jordan taking 2,000 tons of milled and 100 tons of brown, Taiwan shipping 1,000 tons, Canada 800 tons of milled and 200 tons of brown, and Japan taking 600 tons milled.

Asia

Asia’s week finished with minor changes from last Friday’s quotes.  Thai 100% Grade B was called $405 per ton fob vessel for old crop and $420 per ton for new crop.  Thai parboiled was still at $410 per ton.  Viet 5% milled was better at $395 per ton.  Pakistan finished the week with 5% milled at $405 per ton; the last quote we have on parboiled is $425 per ton.  India’s prices remained firm also, with 5% milled at $425 per ton and parboiled at $410 per ton – unchanged from last week.

The Rice Advocate


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