The rice market has experienced a general malaise this week with a lackluster future performance, a lukewarm sales report, softening Asian pricing, and a downward trading futures market.
In the export sales report this week, a total of 57,200 MT of rice was reported to have sold. This figure seems to be the new norm as total volume has tended to revert back to these levels in the past weeks. Numbers closer to the 70,000 MT mark would be much more beneficial, but until stronger demand dynamics develop the current sales volume is much more favorable than the much lower figures that have also been recently noted.
Vessel loadings were down since the previous report as well, but with limited new sales to ship against, this is not a particularly surprising phenomenon. It can be reasonably expected that similar numbers on both the sales and shipping columns will be seen more often in the coming weeks.
Asian markets have shown a bit more slippage over the week. This softer market undertone seems to mirror the cooling off of the other market indicators and while it is not indicative of a reversal, it does suggest that the market may be digesting the global fundamental factors prior to a market move. Some of the movements are a result of exchange rate fluctuations given the financial uncertainty that has beset many of the external markets of recent date.
The futures market saw modest losses over the course of the week as several factors confounded any attempt at upward momentum. The violent shifts in the domestic stock indices coupled with volatility in the other grain pits were sufficient to bring the open contracts on the board down by almost 2 percentage points in some cases.
The last hope for any futures market gains was linked to a moderately positive WASDE report that never materialized. The resulting decline was predictable but on balance, the futures contracts did not shed as much value as was potentially probable given the combination of negative factors.
The domestic cash market has remained unchanged from the previous week’s report. As has been previously stated, until some market move forces the current impasse, the current situation is unlikely to change.
In other news, the World Agricultural Supply and Demand Estimate (WASDE) was released this week. It was expected that there would be only minor revisions in this installment given the substantive lack of new information that has become available since the prior report.
What was actually surprising was that there were indeed NO revisions to either side of the balance sheet. The only rice specific component that was changed for the domestic market was a $0.10 per hundredweight decrease on the mean of the season average farm price estimate based on lower long grain prices as estimated by the National Agricultural Statistics Service (NASS).
Looking forward, the next report will probably see some reduction in the export numbers if the current export trends hold constant, but until some indication of planted acres emerges the market should remain quiet.