USDA has published the monthly WASDE report. They failed again to subtract the 5MMT that Thailand has admitted is ethanol only. The USDA decreased milled sales by 2MMT because we have no sales to Iraq or Iran. Of course it is possible to increase milled sales to both of those countries and others, but I believe it will take a fair amount of political pressure.
Futures looked like they were trying to make the bottom on Wednesday after 11 straight days down, but Thursdays disappointing USDA report caused another small drop. As we watch the futures, many days it sure does look like algorithm selling. There has been relentless pressure since the last rally ended on January 17th.
Anyone who has ever planted rice knows we are trading below cost of production. Therefore, this close to planting time many farmers and bankers are shifting acres to soybeans. Soybeans prices are not going to make a lot of money, but they pencil a lot better than rice.
The bright spot in this week’s rice story were the weekly exports. We sold 87,000 tons of most rough rice and shipped 113,000 tons. Those are very impressive numbers and should have excited the market. However, USDA WASDE report overshadowed the exports.
India prices have eased this week after strong demand from Africa for the last month. Thailand prices are steady to lower. This has been a long and painful bear market in Rice. Just remember it is always darkest right before dawn!
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