Rice Update: Louisiana Harvest Done, Texas Close, Delta Starting

©Debra L Ferguson Stock Photography

Another generally quiet week in the rice market has transpired as new crop harvest is concluding along the coast and beginning up river. Exports and sales for the week were off again and new business is vital to keep the pricing mechanism alive.

Asian prices were predominately off this week, largely a result of the dollar’s movement. In the futures market, the week started out strong for the nearby contract but selling pressure was too much to bear by the end of the week. The remaining contracts traded for a net positive. The weekly world market price was raised this week which is considered to be a good sign when considered with the other tidbits of news.

Export sales for the week indicated that crop sales were down notably drop from last week’s values at 35,000 MT total. Sales increases to Canada (12,800 MT), Honduras (8,800 MT), Haiti (7,100 MT), Jordan (3,200 MT), and Mexico (1,800 MT) were partially offset by decreases for unknown destinations (2,500 MT). Sales were comprised of long grain rice with the exception of the Jordanian purchase which was comprised of medium/short grain. Vessel loadings declined as well to 43,100 MT. Primary destinations were Mexico (25,300 MT), Haiti (7,100 MT), Honduras (4,800 MT), Canada (3,000 MT), and Saudi Arabia (600 MT). Loadings were composed of long grain.

Asian prices generally declined over the week. Price increases were noted for Myanmar 5% parboiled ($454/MT) and Myanmar 5% ($412/MT). Moderate price decreases were noted for Thai 100%B ($375/MT), Thai 100%B parboiled ($370/MT), Vietnamese 5% ($335/MT), Pakistani 100% sortexed ($285/MT), and Pakistani 5% ($335/MT). All prices are quoted in US Dollars and are f.o.b. vessel.

USDA’s reported world market price values increased over the past week, with the on-farm WMP value of long grain rough now reported at $9.40/hundredweight and the medium/short grain rough values at $9.66/hundredweight.

DOMESTIC MARKET

In the domestic market, the harvest along the Gulf Coast is drawing to a close while the Delta is just beginning to get under way.

Texas reports harvest is over 85% complete with much of the progress due to the favorable weather over the past week. The near term rains that have been experienced will slow the remaining harvest down, but after a very dry July, the moisture is generally welcomed. New crop bids are reported at $5.00-$5.20/hundredweight premiums over loan with some light grower sales indicated at these levels.

The Louisiana harvest is all but completed and some growers are setting their sights on second crop at this point. Early milling yield indications were somewhat favorable, but as more data is collected the 55-58/70 yields are not as positive as was previously hoped for. New crop pricing has held at the 10.18/hundredweight range for FOB farm storage.

Mississippi is beginning to start its main harvest and preliminary yields are reported as being off from expectations. Pricing for new crop is weak, with bids reported at $11.00/hundredweight delivered to an export point or $11.11/hundredweight for October/November/December delivery. With the lower prices, most growers in the state are holding back for better FOB farm values later in the season.

The Arkansas harvest in the southern part of the state has indicated that field yields are off by as much as 15%, which is consistent with what has generally been reported by all of the other harvested areas to date. With very little milling yield information to go on yet, it will be interesting to see if the trend will extend to the northern counterparts. Bids have remained mostly unchanged at $0.85/hundredweight under the September futures price for new crop harvest delivery, with old crop being priced at the $10.44-$10.55/hundredweight level.

Missouri reports generally good weather during pollination season and a few early fields to be drained in the coming week. Pricing for new crop is stable at the $10.67-$11.11/hundredweight.  Growers are looking for higher prices to generate notable selling interest in the new crop environment.

The bears won out as the market struggled to sustain the gains of the past few weeks. The nearby September contract saw a net negative over the week, while the remaining contracts on the board traded for a net positive. The nearby September ’15 contract opened at $11.82/hundredweight on Monday and climbed through Wednesday before giving way to the selling pressure on Thursday and finishing out the week lower.

Friday’s trading saw a bit of a correction although the weekly close was still off at $11.65/hundredweight. Weekly net trading ranged from -1.46% to 3.73% across the open contracts on the board. The market closed for the week with an average daily volume of 1,262.6 contracts and open interest of 10,526 as of Thursday’s trading.

Export business has slowed to a crawl and more offshore business is crucial to keep the market moving along. Pricing has firmed up generally, which indicates that the rice trade is digesting all of the information as it comes in. This is a good thing as severe market swings would be particularly perilous at this point in the trading game. With the general uptick in the market, it is to be hoped that next week’s report will have some better news to share.


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