Rice Update: Market Continues to Firm Despite Bearish Reports

©Debra L Ferguson Stock Photography

The rice industry has thus far kept its head down and predominately out of the turmoil impacting other grain markets over the past week. During that time, it has continued to make modest gains in most of the benchmark indicators used for market analysis. 

The export sales report was significantly lower this week than has been seen in the past several weeks. Part of the motivation is buyer saturation, especially given the magnitude of sales realized previously, while another part is concern over trade issues. The general lack of supply and market rationing that results plays yet another component in the reduction in volume noted this week.

Conversely, the export tonnage was very high as compared to prior week values and can be expected to remain strong until the inventory on the books makes it to delivery.

Asian pricing was generally muted since the last report as the Thai market is closed for the New Year holiday. Other Asian classes posted modest gains but unless a major and unforeseen scenario unfolds in the East, the market is unlikely to make big moves in the short term.

Even the world market price estimate was unchanged from last week’s numbers. In all, from a global perspective, the market remains firm but quiet.

Domestically, old crop pricing indicates that bidders are slowly feeling out the market for remaining old crop lots with very little (if any) business being done. Growers are now focused on new crop and what little news has arisen has given some hope for stronger prices. Early indicators are few and far between in all areas, but it is speculated that $13.00/hundredweight pricing at harvest would probably generate some business.

From a production perspective, the final fields are being sown in the Deep South at this point, but weather concerns have the Upper Delta planting on hold. Cold temperatures and precipitation are the culprit in many areas. With surging soybean and corn prices, there is still a possibility that some rice acres may be converted at zero hour although the actual quantity of acres is open to speculation.

The futures market had a good week in light of the WASDE report that was released on Tuesday. All of the open contracts on the board posted positive gains ranging from 1%-4%. In the World Agricultural Supply and Demand Estimate, many of the adjustments in acreage and stocks indicated in March were incorporated into the April edition. These left few surprises for rice.

There were no supply side revisions in the latest installment, but on the demand side, total carry out was increased by 4.1 million hundredweights on the expectation of decreased exports.  As a result, the season average farm price was increased by $0.10 per hundredweight on the midpoint of the range, adjusting the final expected price to $12.40-$12.80/hundredweight. 

It was interesting to note that the market continued to post gains even after the report was released, which suggests that the market is tighter than Washington is willing or able to relay.

Full report.

The Latest

Send press releases to Ernst@Agfax.com.

View All Events

Send press releases to Ernst@Agfax.com.

View All Events