The rice industry seems to have gone back to business as usual this week with very little movement in any of the major components in the market.
Asian pricing for the week was sideways with very little change in any of the benchmark origin pricing. Some minor currency fluctuation has occurred since the last report which likely caused the majority of the price changes. All general fundamental factors in Asia remain unchanged for the week.
The export sales report reports decreased sales volume for the week but the current values are still much higher than has been seen in recent months. If the downtrend continues then the next few weeks may see the volume back at lower levels but it is to be expected that by that time some of the traditional buyers will be back in the market to maintain the pace.
Vessel loadings are reported higher indicating that the tonnage on the previous sales is continuing to move through the marketing chain as well.
USDA held the world market price estimate constant for the week which underscores the general sideways indication given by the other market factors. Domestic cash bids are also unchanged in most respects from the previous report. With buyers and sellers generally having predetermined price points, only small volumes of rice are being traded at this time.
Harvest is predominately completed across the South with only a few later lots of second crop left in the field. The next ten days should see those acres completed for the year and allow for a more objective analysis of both the quality and quantity of the 2017 crop to be completed.
The futures market posted yet another week of losses as the bearish trend persists. As the market has passed well beyond the oversold margins, many traders remain confused as to what drivers control the market and which, if any, fundamental factors are responsible.
The final component of the market this week was the issuance of the monthly World Agricultural Supply and Demand Estimate (WASDE) for the month. The report was released on Thursday and the resulting market correction was short lived.
Rice News on AgFax
For this month, the supply side revisions include an upward revision in imports of primarily Thai fragrant rice which slightly offset a lower production estimate of 200,000 hundredweights from last month. The resulting total supply was 248.9 million hundredweights.
On the demand side, exports were reduced by 2 million hundredweights. Both classes were reduced by 1 million hundredweights of export volume as a result of this revision. The net impact of these adjustments was an increase in ending stocks of 2.1 million hundredweights for an estimated total of 29.9 million hundredweights for the year.
The season average farm price was estimated at $12.50 – $13.50 per hundredweight, a net reduction of $0.20 per hundredweight from the previous report.