Rice Update: All Eyes on USDA Prospective Plantings Report

©Debra L Ferguson Stock Photography

Another slow week has passed in the rice market with very little news to report at this time. Cash markets remain very quiet as there is little left to trade, particularly in first hands and growers are focused more on weather concerns at this moment than market forces. 

The weekly export sales report came in lower that last weeks’ numbers, although given the relative volume and magnitude of previous sales, this is not terribly surprising. No real news has materialized from Iraq which was a much anticipated event. While it is too early to say that no business will get done, it was hoped that something would already be on the books by now.

Vessel loadings were also reduced as compared to the previous report. Asian pricing has been generally stable over the week with some minor changes in benchmark classes, but nothing to suggest a major fundamental change in the market.

USDA increased its world market price estimate for the week for both long and medium/short grain classes. This change is less of an indicator than usual given the overall lack of action in any of the other major market segments.

Domestic cash markets have remained stagnant over the past few weeks and this week is no exception. Weather has permitted many growers along the Gulf Coast to begin planting and as the tractors move through the fields, all eyes are on new crop conditions.

In the futures market, the nearby March ’18 contract quietly and uneventfully left the active board to be replaced by the May ’18 contract as the new nearby instrument. Trading over the week was muted on lower volume and open interest than has been seen in weeks past. 

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Overall, the market had a relatively “good” week with all open contracts posting positive gains over last week’s values.

As has been noted in previous reports, the next real slug of information to hit the market will be the prospective plantings report to be released by USDA on March 29. This report will be the first to give some insight as to what the acreage blend my look like across the country, not just for rice, but also for the other major crops.

The market can be expected to react to the report regardless of the size and direction of prospective acres and it can also be anticipated that from now until a few weeks after its release that growers will be looking for strategic marketing opportunities to lock in pricing on both old and new crop.

Full report.

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