Farmers across the South are gearing up to take advantage of weather opportunities and get the new crop planted.
The weekly export sales report indicated total sales for the week at 63,000 MT. This represents a 34% decline from last week’s volume but remains at a respectable level. Vessel loadings surged by 60% over the previous weeks tonnage to almost 107,000 MT as the purchased grain continues to move through the system against existing orders. Continued sales of 60,000 MT or better will be necessary for any market momentum to develop prior to new crop harvest. Any additional sales that keep the overall demand high could easily break the impasse between buyers and sellers at the farm level.
Asian pricing for the week was generally sideways with some minor movement in individual benchmark types. Larger production projections for parts of Southeast Asia have as of yet, no real impact on the pricing. While this will undoubtedly provide some incentive for the market not to appreciate, the fact that it has not depressed pricing suggests that there may yet be a stronger market scenario than was previously thought. The weekly World Market Price report from USDA further supports this in the short term as the reported world price for both classes of rice remains unchanged from the previous report.
DOMESTIC CASH MARKET
The domestic cash market has remained stagnant since the last report. Some basis shifts and futures market fluctuations have tweaked the pricing, but the large volume trading has been virtually non-existent. With a firm foundation for the current pricing and minimal latitude from the buyers, the current situation can be expected to remain the status quo barring any significant market news in the coming weeks.
The futures market has continued to post losses this week, with all open contracts on the board shedding about a percentage point in value from the previous week’s trading. This situation is somewhat confounding the industry as the cash markets have all held firmly and at higher levels. With the basis spread between the cash and futures market, as well as the intramonthly spread between contracts staying counterintuitive, an argument can be made that a correction is in the offing. Whether this correction actually materializes is a matter of speculation.