It has been another slow week in the rice trade with old crop virtually gone and new crop still being too distant to generate much excitement. The general market indicators continue to suggest that the market undertone is solid if not bullish for new crop and the biggest question mark is how these factors will materialize.
The export sales report for the week was notably improved from last week’s 15,000 MT volume at a reported 50,400 MT. This is still not quite where the market would be considered to be “good” but during this time in the marketing cycle is not completely abnormal. Vessel loadings were reported slightly stronger than the previous report which indicates that old sales continue to move through the system.
Asian pricing has been generally sideways although there is not much in the way of news in that sphere either. USDA’s world market price estimate has been increased again which marks the fourth week in a row that this indicator has appreciated. All in all, these factors point toward a stronger market for new crop.
In the domestic cash market, most growers are still focused on getting the 2018 crop to harvest which entails everything from planting the fields to getting up the stand of rice, depending on the region. Weather has continued to hamper this process particularly in the Upper Delta where it has been more difficult to get the rice in the field.
Warmer weather has finally shown up across the South and has contributed significantly to rice development over the past week. Growers in Texas and Louisiana are working to move water across the fields at this point and while the warm weather is a welcome occurrence, a bit of rain would not be amiss either.
From a price standpoint, new crop indications have begun to emerge from buyers. These are exactly that – indicators – as very little (if any) business is being done at the current prices.
The futures market had a rough week, particularly given the fact that the underlying physical market is trying to be bullish.
Rice News on AgFax
In other news, UDSA released its monthly World Agricultural Supply and Demand Estimate (WASDE) this week. In the current installment of the publication, there were few surprises for rice.
The supply side adjustments included a 14% increase in total production to 203.2 million hundredweight and a 5% increase in total supply to 263.5 million hundredweight on higher expected long grain production. The demand side revisions included an increase in total use of 3% totaling 223.0 million hundredweights based on stronger expected domestic use and export numbers.
The net result of these changes was a 40.5 million hundredweight ending stocks number (up 18% from the previous year) and an expected season average farm price of $11.90 – $12.90 per hundredweight.
While the new revisions are not illogical given the market indicators, the exact figures are a very long way from being finalized.