The rice market has been somewhat quieter this week as growers along the Upper Delta are beginning to assess the damage from the flooding and all of the attention has been focused in that area. On balance, it has been a generally positive week for farmers from a marketing perspective.
Cash prices have continued to strengthen as new crop supply concerns persist. There is still quite a bit of old crop to move along the river but with the deep south virtually exhausted, the trade will begin to work through those inventories soon.
Export sales for the week have not been accommodating to the new business however as the total volume reported for the week remains low. If existing trends continue then the buyers should be looking to make some key purchases within the next 14 days.
This is especially the case if the cash market volatility begins to increase or if the cash prices make noticeable gains in the next few days. Given the large supply yet to be consumed, this cash market boost is unlikely.
Vessel tonnage was also down from last week’s values. Tonnage could reasonably have been expected to have been more positive given the sales on the books but logistical concerns are also a limiting factor.
Asian pricing seems to be firming up as well. All indicator bids reported suggest that the market is continually drifting higher with each passing week. It will be interesting to see what impacts the Asian new crop harvest will have on current pricing.
USDA’s world market price (WMP) was increased again this week which is in concordance with the other indicators in the rice market. It is reasonable to expect some volatility in the estimate in the coming weeks as the trade comes to grips with the aftermath of the flooding along the Mississippi River.
The futures market has had some very interesting sessions over the week with all open contracts closing net higher over the previous weeks pricing. It is surprising to some degree that the tremendous late-week price moves in the grain complex did not spill over into the rice market.
Given the negative price moves seen in the other commodities however, it is definitely welcome. In farm country, the general consensus is that what rice has been planted is representative of the rice that will be planted. Said another way, growers are not clamoring to replace acres that were devastated by the weather.
Weather is still a major concern, especially across the Midwest which is expecting more precipitation to fall over the weekend. Other crops remain very concerned with the outcome and decisions to be made by farmers as the final planting mix in this region will have a long-term impact on the corn, soybean, and cotton markets.
Rice will doubtlessly follow suit with its larger cousins but the effects should be more moderate. Overall, the rice market is shaping up to have a bit more upside potential than could have been said in January, but there is still a lot of time before harvest.