In the latest weekly USDA Crop Progress report, the U.S. rice crop was 29% harvested compared to the 5-year average of 30% for the week ending September 3. Arkansas was estimated at 18% harvested. With dry weather conditions this week Monday’s updated Crop Progress may indicate Arkansas’ harvest is now closer to the historical average pace of 34% for the week ending September 10.
Harvest is coming to a close in Louisiana and Texas with harvest now estimated to be over 90% complete.
Long-Grain Export Sales:
- Export activity for the week ending August 31 was mixed. Sales recovered for both rough and milled rice to the 2nd highest weekly totals for the marketing year. Haiti was in for 22,250 metric tons of milled rice. As expected, rice shipments were very low last week due to recent weather events and dipped to marketing year lows for both classes.
- All ports in the Houston region are now open. The USDA-AMS reported this week that some ports are open with draft restrictions still in place. Comments from Union Pacific this week indicated that railroads have made significant progress to restore service. Reroutes are in place around areas still flooded or sections that require extended time to repair.
- By class, cumulative long-grain rough rice sales are down 22% from a year ago. However, milled rice sales are up 119%. Due to stronger milled rice sales to date, total long-grain exports are running 14% ahead of last year’s pace as of August 31.
Rough Rice Futures:
- With a week of dry weather in the Midsouth and Hurricane Irma staying out of the Gulf of Mexico, the rice market found it hard to sustain its’ upward momentum this week. November rice futures have erased all of last week’s gains and look poised to finish the week near $12.71—basically where prices were the day Hurricane Harvey made landfall.
- As of Friday morning (9/8), Hurricane Irma’s path has been shifted slightly westward, with the Florida peninsula now in the crosshairs. Beyond this weekend, the remnants of the storm are likely impact Georgia and South Carolina with high wind and heavy rain.
- By Tuesday night, northeast Arkansas may get some rain from Irma as the storm remnants move in a north westerly direction. Bottom line for the rice market, the Gulf will be spared from tropical activity through the latter part of September.
- Plus, temperatures are expected to warm noticeably toward the end of next week. This is certainly the outlook needed to move harvest along. The potential downside could come in the form of softer prices as price support from weather concerns starts to fade.
- As trading resumes Sunday night, the grain markets will be waiting for USDA’s revised yield and production figures next week. The USDA will release its September WASDE report on Tuesday the 12th. Traders will generally keep to the sidelines ahead of key monthly USDA reports.