Rice Outlook: U.S. Production Projected at 203.2 Mln Cwt

©Debra L Ferguson

The first forecast for the 2018/19 U.S. rice crop pegs production at 203.2 million cwt, up 14 percent from a year earlier, with long grain accounting for most of the production increase. The increase is primarily due to an area expansion, along with a slightly higher average yield.

Despite projections for larger domestic use and expanded exports, U.S. 2018/19 ending stocks are expected to increase 18 percent to 40.5 million cwt. The season-average farm price is projected to decline for both U.S. long-grain and southern medium- and short-grain rice in 2018/19, but to increase for California medium- and short-grain rice.

In the global rice market, 2018/19 production, consumption, and trade are all projected to be record high. Despite record global use, ending stocks are projected to increase fractionally to 144.7 million tons, the highest since the 2000/01 record.

Global and U.S. trading prices have increased over the past month, with Asian prices supported by strong recent purchases, especially by the Philippines.

Domestic Outlook

U.S. 2018/19 Rice Production Projected at 203.2 Million cwt

The 2018/19 U.S. rice crop is projected to be up 14 percent from a year earlier. The expected production increase is due primarily to expanded area, along with a slightly higher average yield.

At 2.69 million acres, planted area is up more than 9 percent from a year earlier, with harvested area projected at 2.67 million acres—an increase of 12.5 percent from 2017/18, which experienced a higher than average abandonment due to adverse weather.

The 2018/19 planted area forecast is from the March planting intentions reported by NASS. The first survey of actual plantings of the 2018/19 U.S. rice crop will be reported in the June Acreage to be released on June 29. Harvested area for 2018/19 is based on the previous 5-year average of harvested area to plantings ratio.

Rice News on AgFax


The 2018/19 all-rice yield is forecast at 7,610 pounds per acre, up 1.4 percent from a year earlier but still below the 2013/14 record of 7,694 pounds.

The 2018/19 yield forecast is based on 1998/99-2017/18 trend yields by class, with the two production forecasts by class added to determine total rice production and the average yield.

Long-grain production is forecast at 150.2 million cwt, up 17.5 percent from a year earlier, mostly due to expanded plantings in the South. The intended area expansion is largely due to rising prices at planting and expectations of stronger net returns for rice than for competing southern crops, primarily soybeans. Almost all U.S. long grain rice is grown in the South.

Combined medium- and short-grain production is projected at 53.0 million cwt, up 5 percent from a year earlier, primarily due to larger plantings in the South. Southern medium-grain yields are typically 20 percent less than yields in California, where the bulk of the U.S. medium- and short-grain crop is produced.

The first objective yield forecast for the 2018/19 U.S. rice crop will be reported by NASS in the August Crop Production released on August 10, which will include State yields as well.

Planting Pace of 2018/19 Crop Near-Average in the South

Although plantings in much the South, particularly the Delta, got off to a slower-than-normal start this year due to a cool, wet spring, the pace of plantings had caught up to near-normal by early May.

For the week ending May 6, planting of the 2018/19 total U.S. rice crop was estimated to be 68-percent complete. This is 8 percentage points behind a year earlier’s rapid pace but just 1 percentage point behind the 2013-2017 U.S. average, despite the slow start in the Delta, the largest growing region.

As is typical in early May, crop progress was most advanced along the Gulf Coast, the southern-most rice growing region in the United States. In Louisiana, 96 percent of the 2018/19 rice crop was reported planted by May 6, unchanged from a year earlier, but 4 percentage points ahead of the State’s 5-year average.

In nearby Texas, 84 percent of the 2018/19 crop was reported planted by May 6, up 3 percentage points from a year earlier, but unchanged from the State’s 5-year average. The pace of plantings in both of these Gulf Coast States had been ahead of normal since the start of the 2018/19 season.

Plantings were not as advanced in the remaining producing States, partly due to their more northern geographic location but also to adverse weather this year. An abnormally cool and wet spring delayed progress early in the season in the Delta, but the region has almost caught up due to warmer weather and a fast pace of planting.

For the week ending May 6, 77 percent of the Arkansas 2018/19 rice crop was estimated planted, well behind last year’s rapid pace of 92 percent, but 2 percentage points ahead of the State’s 5-year average.

In nearby Missouri, 65 percent of the 2018/19 rice crop was estimated to have been planted by May 6, 3 or 4 percentage points below both last year and the State’s 5-year average.

Mississippi’s 2018/19 rice crop was estimated to be 64 percent complete by May 6, 19 percentage points below last year’s rapid pace, but just 4 percentage points below the State’s 5-year average.

In contrast to much of the South, plantings in California are well behind the State’s 5-year average, mostly due to an abnormally cool spring. In 2017/18, plantings in California were severely slowed by excessive rainfall, snow runoff, and subsequent flooding.

For the week ending May 6, just 12 percent of the 2018/19 California crop was estimated to have been planted, up from just 3 percent planted last year—which was a severely delayed crop—but still well below the State’s 5-year average of 31 percent. About 10 percent of the California 2018/19 intended rice area was planted from April 30 to May 6 as weather improved.

Although plantings had almost caught up with 5-year State averages in the South, emergence remains behind both last year’s pace and 5-year averages across most of the U.S. rice growing areas, with the Gulf Coast the only exception.

For the week ending May 6, 44 percent of the U.S. 2018/19 rice crop had emerged, well behind 64 percent a year ago and also behind the U.S. 5-year average of 50 percent.

On the Gulf Coast, 87 percent of Louisiana’s 2018/19 crop had emerged by May 6, behind 92 percent a year ago but slightly ahead of the State’s 5-year average of 84 percent. The Texas 2018/19 rice crop was reported 77 percent emerged by May 6, 2 percentage points ahead of last year but unchanged from the State’s 5-year average.

AgFax Weed Solutions


Farther north, crop development was less advanced than on the Gulf Coast—as is typical—and behind State 5-year averages.

In Arkansas, 46 percent of the 2018/19 crop had emerged by May 6, well behind 76 percent last year and 8 percentage points behind the State’s 5-year average.

In nearby Missouri, just 26 percent of the 2018/19 crop had emerged by May 6, well behind last year’s 51 percent and behind the State’s 5-year average of 43 percent.

Mississippi’s 2018/19 rice crop was reported 31 percent emerged by May 6, also sharply behind last year’s 68 percent and 13 percentage points behind the State’s 5-year average.

None of California’s 2018/19 crop had emerged by May 6, unchanged from last year’s delayed crop but well behind the California 5-year average of 10 percent.

U.S. 2018/19 Total Supplies Projected To Be Down 5 Percent

Total rice carryin for 2018/19 is projected at 34.3 million cwt, down 26 percent from a year earlier and the smallest since 2014/15. Long-grain carryin in 2018/19 is projected at 20.4 million cwt, down 34 percent from a year earlier, also the lowest since 2014/15.

Medium- and short-grain carryin is forecast at 10.4 million cwt, down 10 percent from 2017/18. The smaller carryin in 2018/19 is mostly due to a substantial crop reduction in 2017/18, which cut total supplies 15 percent. Stocks of brokens, which are included in the stocks total, are not classified by grain length.

Imports in 2018/19 are projected at 26.0 million cwt, unchanged from the year-earlier record. Aromatics from Asia, mostly classified as long grain, are expected to continue to account for the bulk of U.S. rice imports, with Thailand continuing to be the largest supplier.

Long-grain 2018/19 imports are projected at 22.5 million cwt, also unchanged from the year-earlier record. Medium- and short-grain imports in 2018/19 are projected at 3.5 million cwt, unchanged from a year earlier but well below the 2006/07 record of 6.3 million cwt when Puerto Rico was importing substantial amounts of rice.

Total U.S. rice supplies in 2018/19 are projected at 263.5 million cwt, up 5 percent from a year earlier, a result of a larger crop. Long-grain supplies are projected at 193.1 million cwt, up 6.5 percent from a year earlier, also due to a much larger crop. Medium- and short-grain supplies are forecast at 66.9 million cwt, up 2 percent from 2017/18. Despite the expected increases, total supplies remain below-record for all rice and both classes of rice.

U.S. Exports and Domestic Use Projected Higher in 2018/19

Total use of U.S. rice in 2018/19 is projected at 223.0 million cwt, up 3 percent from a year earlier, with both exports and domestic use projected higher. Long-grain total use is projected at 167.0 million cwt, up 4 percent from 2017/18. Medium- and short-grain total use in 2018/19 is projected at 56.0 million cwt, an increase of 2 percent from a year earlier, with exports accounting for all of the increase.

Total domestic and residual use in 2018/19 is projected at 122.0 million cwt, up 2 percent from a year earlier but still well below the 2010/11 record of 136.9 million cwt. Domestic and residual use accounts for post-harvest losses, including unreported losses in processing, marketing, and transporting.

These losses are typically proportional to the crop size. Long-grain domestic and residual use is projected at 95.0 million cwt, up 3 percent from 2017/18. Medium- and short-grain domestic and residual use is projected at 56.0 million cwt, an increase of 2 percent from 2017/18.

Total U.S. rice exports in 2018/19 are projected at 101.0 million cwt, up 5 percent from a year earlier but still well below the 2016/17 near-record of 116.6 million cwt.

The expected export increase in 2018/19 is based on larger supplies, lower prices for long-grain and southern medium-grain rice, and a smaller price difference with major Asian and South American competitors in the global long-grain market when larger U.S. supplies in 2018/19 become available.

Rough rice exports in 2018/19 are projected to increase 10 percent to 34.0 million cwt, with expanded sales to Latin America accounting for most of the increase. U.S. sales to the Mediterranean are expected to be higher as well. Latin America accounts for the bulk of U.S. rough-rice exports, taking almost exclusively long-grain rice.

North Africa and the Middle East account for most of the remaining rough-rice exports, purchasing mostly medium-grain rice, primarily from the South. Milled rice exports (combined milled and brown rice exports on a rough-basis) in 2018/19 are projected at 67.0 million cwt, up 3 percent from a year earlier.

Latin America, the Middle East, and Northeast Asia are likely to import more U.S. milled-rice in 2018/19, with growth in Northeast Asia mostly accounted for by shipments purchased in 2017/18. These three markets and Canada account for the bulk of U.S. milled rice exports.

U.S. long-grain exports in 2018/19 are projected at 72.0 million cwt, up 3.0 million cwt from a year earlier. Latin America, the largest market for U.S. long-grain rice, is expected to account for much of the increase, mostly due to more competitive prices.

In recent years, the United States has lost market shares in both Mexico and Central America, mostly to South American exporters and, to a much lesser extent, some Asian exporters. The U.S. remains the largest supplier to both of these substantial rice-import markets, but its share continues to decline, mostly due to more competitive prices from South American exporters.

U.S. Ending Stocks Projected To Increase 18 Percent in 2018/19

U.S. rice ending stocks in 2018/19 are projected at 40.5 million cwt, up 18 percent from a year earlier but still below the abnormally high levels held in 2014/15-2016/17. The substantial increase in ending stocks in 2018/19, despite higher expected domestic use and exports, is due to a 14-percent increase in production.

The 2018/19 stocks-to-use ratio is projected at 18.1 percent, well above 15.9 percent in 2017/18. The stocks buildup varies by class. Long-grain 2018/19 ending stocks are projected at 26.1 million cwt, up 28 percent from a year earlier.

The long-grain stocks-to-use ratio is projected at 15.6 percent, 3 percentage points above 2017/18. An ending-stocks projection and stocks-to-use ratio of these levels will likely put downward pressure on long-grain prices during the 2018/19 market year.

For medium- and short-grain rice, 2018/19 ending stocks are projected at 10.9 million cwt, up 5 percent from a year earlier. The medium- and short-grain stocks-to-use ratio is projected at 19.4 percent, up just 0.6 percent from 2017/18. This level of medium- and short-grain carryout is not excessive, with downward price pressure limited to the southern medium-grain due to expected higher area.

For the 2017/18 U.S. rice balance sheet, there was a 1.0-million cwt increase in total imports to a record 26.0 million cwt, 11 percent above a year earlier. The upward revision was based on the pace of deliveries through March, which were about 12 percent ahead of a year earlier.

Shipments from Thailand, which accounts for 60-65 percent of U.S. rice imports, were up 7.5 percent from a year earlier. Its premium jasmine rice accounts for most of these imports. Imports from India, the second largest supplier, were up more than 22 percent from a year earlier, with its premium basmati accounting for almost all of the shipments.

Although a much smaller supplier, Brazil had shipped almost 23,000 tons of rice to the United States through March, up 107 percent from a year earlier. Imports through March from Canada were nearly 10,000 tons, up 34 percent from a year earlier. This rice was initially imported by Canada, fully processed and packaged in Canada, and then exported to the United States.

By class, long-grain imports were increased 1.0 million cwt to a record 22.5 million cwt. Combined medium- and short-grain imports remain forecast at 3.5 million cwt. Thailand is the largest supplier of both classes of rice. The larger long-grain import forecast raised long-grain supplies and ending stocks.

Long-Grain Season-Average Farm Price Projected To Decline

The 2018/19 long-grain season-average farm price is projected at $11.00-$12.00 per cwt, compared with $11.60-$11.80 a year earlier, with the midpoint down 20 cents in 2018/19. The slightly lower midpoint in 2018/19 is based on expected larger supplies.

The southern medium- and short-grain season-average farm price is projected at $11.20-$12.20 per cwt, compared with a revised $11.90-12.10 a year earlier, with the midpoint 30 cents below a year earlier. The decline is based on larger supplies stemming from increased area.

In contrast, the California 2018/19 medium- and short-grain season-average price is projected at $16.50-$17.50 per cwt compared with a revised $16.20-$17.00 for 2017/18, with the midpoint up 40 cents. The higher 2018/19 midpoint is based on smaller intended area in California.

The U.S. medium- and short-grain season-average farm price is projected at $14.70-$15.70 per cwt, compared with $14.90-$15.50 a year earlier, with a mid point of $15.20 each year.

The all-rice 2018/19 season-average farm price is projected at $11.90-$12.90 per cwt, compared with $12.40-$12.80 in 2017/18. The 2018/19 midpoint is 20 cents below a year earlier.

For 2017/18, USDA raised the midpoint of the California medium- and short-grain season-average price 10 cents per cwt to $16.60 and lowered the southern medium- and short-grain season-average farm price midpoint 10 cents per cwt to $12.00.

Both revisions were based on monthly reported cash prices and marketings through March and expectations regarding prices and marketings the remainder of the market year. The midpoint of the U.S. medium- and short-grain season-average farm price remains $15.20 per cwt as these regional revisions offset each other.

In late April, NASS reported the March long-grain price at $11.90 per cwt, unchanged from a month earlier but up $1.20 from August.

The southern medium- and short-grain March price was reported at $12.30 per cwt, down 30 cents from February but up $1.30 from August.

The California medium- and short-grain March price was reported at $17.90 per cwt, up 60 cents from February and the highest since May 2016.

The U.S. medium- and short-grain March price was reported at $15.60 per cwt, up 80 cents from February. The all-rice March price was reported at $12.70 per cwt, up 10 cents from February.

Full report.

Weather

Markets

The Latest