Dossett on Rice: Prices Have Been Stable; Watch for More Contracts

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Cash Rice Market

  • Prices in India are rock solid. The monsoon has progressed and it looks like a good crop. Prices in Thailand are slipping lower. The price for White Rice 5% was $397 for the first two weeks of August. This week they have dropped to $391. Vietnam has lowered their prices today. Many of India’s neighbors who need rice are buying from Thailand instead of India. The biggest governments that are buying are Bangladesh and Sri Lanka.
  • USA has signed a new agreement with Colombia. The new agreement is less restrictive than the previous one signed in 2012. Read more here.
  • Iraq has tended for US only rice this week. We hear that the Iraqi Grain Board has been shuffled again and the new chairman may be more interested in doing US business. Mexico’s demand for US rice is very strong. Many trains and ships are leaving the South Louisiana Rail Facility headed to Mexico. They continue to favor our good quality rice. We continue to hear that yields in Louisiana are in the 40-45 barrel range. Yes, there are some 35 barrel and some 50 barrel yields, but we will stay with a low 40s average.
  • Mississippi reports this morning that first yields on Clearfield 153 are at 185 bushels. They will really be rolling next week.  Arkansas continues to be hit with big rains. Mississippi is getting them also, but Arkansas is having a hard time getting drained enough to harvest. Export sales have been around 50,000 tons per week, which is about average. Nothing exciting there until we see if Iraq tender is for real.

Rice Harvest Restarts In Arkansas With Positive Early Reports – AgFax   8-18

Futures Market

  • As we approach the delivery of the September Futures contract, we see 1,836 contracts certified for delivery.
  • The biggest numbers, as of today, are at Otwell, Arkansas (510) and McGehee, Arkansas (342). Prices have been unusually stable for the past month. Certainly the great reduction of planted acres in USA and all the rains and flood problems justify the price.
  • We will watch carefully to see if more contracts are registered in the next two weeks prior to FND, which is Thursday, August 31. If you see a big increase then you might see large deliveries giving you a chance to buy rice under $12.00. But if rains continue in Arkansas and there are few deliveries you might get a chance to hedge at much higher prices.

Futures trading is risky and not suitable for all customers.

Markham B. Dossett was a Charter member of the New Orleans Commodity Exchange. He has traded rice since early 1981. He owns Talon Asset Management LLC where he hedges rice, soybeans, corn, wheat, cotton and cattle for producers in the South and Southwest.

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