Rice Outlook: U.S. Export Forecast Raised

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There were several revisions this month to the 2018/19 U.S. rice balance sheet. First, carryin was increased 3.0 million cwt to 37.3 million due to trade revisions for 2017/18. Second, the 2018/19 import forecast was raised 1.0 million cwt to a record 27.0 million cwt, with the increase all long-grain.

Third, 2018/19 U.S. exports were raised 2.0 million cwt to 103.0 million cwt based on expected delayed shipments of medium- and short-grain sales made in 2017/18. Finally, domestic use in 2018/19 was increased 1.0 million cwt to 123.0 million cwt based on larger supplies.

These revisions resulted in a 1.0-million cwt increase in the 2018/19 all-rice ending stocks forecast to 41.5 million cwt. The 2018/19 season-average price forecasts for all classes of rice were unchanged from last month.

Domestic Outlook

U.S. 2018/19 Rice Imports Projected at Record 27.0 Million Cwt

There were two supply side revisions to the 2018/19 U.S. rice balance sheet this month. First, beginning stocks were increased 3.0 million cwt to 37.3 million cwt due to larger imports and weaker exports in 2017/18. Despite the upward revision, the 2018/19 carryin is forecast 19 percent below a year earlier.

The 2018/19 long-grain carryin was increased 1.0 million cwt to 21.4 million cwt, 31 percent below a year earlier. The 2018/19 medium- and short-grain carryin forecast was raised 2.0 million cwt to 12.4 million cwt, nearly 8 percent larger than a year earlier. Beginning stocks of brokens, included in total stock estimates, are not classified by length of grain.

Second, the 2018/19 U.S. rice import forecast was increased 1.0 million cwt—all long-grain—to 27.0 million cwt, unchanged from the year-earlier revised record. The upward revision was based on a record pace of monthly shipments from August 2017 through April 2018.

The 2018/19 U.S. long-grain import forecast was increased 4 percent to 23.5 million, also unchanged from the year-earlier record. Similar to 2017/18, Asian aromatics are expected to account for the bulk of U.S. rice imports, with Thailand the largest supplier, followed by India.

Combined medium- and short-grain imports remain forecast at 3.5 million cwt, unchanged from a year earlier, but well below the 2006/07 record of 6.3 million cwt. Specialty rice from Thailand accounts for most of U.S. medium- and short-grain rice imports, with Italy’s premium Arborio much of the remainder.

The 2018/19 U.S. rice crop remains projected at 203.2 million cwt, up 14 percent from a year earlier. The expected production increase is due primarily to expanded area, along with a slightly higher average yield. Long-grain production remains forecast at 150.2 million cwt, up 17.5 percent from a year earlier, mostly due to expanded plantings in the South. 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.

Area forecasts for the 2018/19 crop are currently based on the March survey of farmers planting intentions. The results of first USDA survey, conducted this month, of actual 2018/19 rice plantings will be released on June 29 in the Acreage report. Yield forecasts for 2018/19 are currently based on 20-year trends by class. The first survey-based yield forecasts for the 2018/19 crop—all-rice and by State—will be released on August 10 in the Crop Production report.

Rice News on AgFax


Planting of the 2018/19 U.S. rice crop is complete, with crop emergence near 100 percent in all six rice producing States. The crop has just started to head on parts of the Gulf Coast, and heading will begin in the Delta late this month. Harvest is expected to begin on the Gulf Coast in late July, slightly behind a year earlier, with harvest typically beginning a month later in the southern Delta.

Despite an abnormally cool and wet early spring that initially delayed planting and progress in many areas, much of the South—particularly the Gulf Coast—had been extremely hot and dry in recent weeks, likely accelerating development but possibly hindering conditions.

Overall, the condition of the 2018/19 U.S. crop is superior to a year earlier as weather has been more favorable than in 2017/18, when early season flooding and late-season excessive heat adversely impacted much of the southern rice crop, especially in the Delta. For the week ending June 10, 2018, 71 percent of the total U.S. rice crop was rated in good or excellent condition, down from 74 percent a week earlier but 3 percentage points above a year earlier.

Conditions were reported higher than a year earlier in the Delta, the largest rice growing region in the U.S.

In the Delta, 66 percent of the 2018/19 Arkansas rice crop was rated in good or excellent condition for the week ending June 10, down from 70 percent a week earlier but 5 percentage points above 2017/18. Also, just 5 percent of the Arkansas crop was rated in poor or very poor condition, compared with 12 percent a year earlier.

In nearby Missouri, 69 percent of the 2018/19 rice crop was rated in good or excellent condition, up 1 percentage point from a week earlier and 5 percentage points higher than in 2017/18. In addition, just 4 percent of Missouri’s 2018/19 crop was rated in poor or very poor condition, well below 10 percent a year ago.

In Mississippi, for the week ending June 10, 85 percent of the 2018/19 crop was rated in good or excellent condition, up 1 percentage point from a week earlier and well above 67 percent in 2017/18.

In contrast, on the Gulf Coast, crop conditions were rated below a year earlier. For the week ending June 10, 69 percent of Louisiana’s 2018/19 rice crop was reported in good or excellent condition, down 1 percentage point from a week earlier and 4 percentage points below conditions in 2017/18.

In Texas, just 57 percent of the 2018/19 rice crop was rated in good or excellent condition, down 8 percentage points from both a week earlier and a year ago. In addition, 8 percent of the 2018/19 Texas rice crop was rated in poor or very poor condition compared with none a year earlier. Temperatures have been extremely hot in both States in recent weeks, with little rain.

In California, 90 percent of the 2018/19 rice crop was reported in good or excellent condition, unchanged from last week or a year earlier.

Total U.S. rice supplies in 2018/19 are projected at 267.5 million cwt, up 4.0 million cwt from the previous forecast—a result of a larger carryin and a higher import forecast—and more than 6 percent large than a year earlier. The year-to-year supply increase is due to a much larger crop. Long-grain supplies are projected at 195.1 million cwt, up 2.0 million cwt from the previous forecast and up 7 percent from a year earlier, also due to a much larger crop.

Medium- and short-grain supplies are forecast at 68.9 million cwt, up 2 million cwt from the previous forecast due to a larger carryin and more than 5 percent larger than in 2017/18. Despite the expected increases, total U.S. rice supplies remain below record for all-rice and for both classes of rice.

Forecasts for 2018/19 U.S. Exports and Domestic Use Raised

This month, USDA raised its 2018/19 forecasts for both domestic use and exports. Total domestic and residual use of rice in 2018/19 is projected at 123.0 million cwt, up 1.0 million cwt from the previous forecast and 2.5 percent larger than a year earlier. The upward revision was primarily based on a larger supply forecast. Despite the upward revision, domestic use is still well below the 2010/11 record of 136.9 million cwt.

Domestic and residual use account 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 96.0 million cwt, an increase of 1.0 million cwt from the previous forecast and 4 percent larger than in 2017/18. Medium- and short-grain domestic and residual use remains projected at 27.0 million cwt, a decrease of almost 4 percent from 2017/18, as exports are projected to account for a larger share of use in 2018/19 than in 2017/18.

Total U.S. rice exports in 2018/19 are projected at 103.0 million cwt, an increase of 2.0 million cwt from the previous forecast and almost 10 percent larger than a year earlier. This month’s upward revision in exports is based on expectations that current sales from the 2017/18 market year—mostly medium- and short-grain purchased by Japan—will not actually ship until early 2018/19.

On an annual basis, the expected export increase in 2018/19 is based on larger supplies, slightly 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.

Rough rice exports in 2018/19 remain projected at 34.0 million cwt, up 10 percent from 2017/18, with expanded shipments to Latin America accounting for most of the expected increase. U.S. sales to the Mediterranean are expected to be higher as well, largely due to a much smaller crop in Egypt, a major supplier to the region.

Latin America accounts for the bulk of U.S. rough-rice exports, taking almost exclusively long-grain rice. Markets in the Mediterranean account for most of the remaining U.S. rough-rice exports, purchasing mostly medium-grain rice, typically from the South.

U.S. milled rice exports (combined milled and brown rice exports on a rough basis) in 2018/19 are projected at 69.0 million cwt, an increase of 2.0 million cwt from the previous forecast and 9.5 percent above a year earlier. The upward revision was totally due to expectations that some shipments already purchased by Japan in 2017/18 will not actually ship until after the start of the 2018/19 market.

These sales were all medium- and short-grain and purchased as part of Japan’s World Trade Organization commitments. On an annual basis, Latin America, the Middle East, and Northeast Asia are likely to import more U.S. milled-rice in 2018/19, with the expected growth in Northeast Asia mostly accounted for by the shipments purchased in 2017/18.

These three markets and Canada account for the bulk of U.S. milled rice exports. Europe and Sub-Saharan Africa purchase much smaller amounts.

U.S. long-grain exports in 2018/19 remain 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 exports, is expected to account for much of the increase, mostly due to more competitive U.S. prices and larger supplies.

In recent years, the United States has lost market shares in both Mexico and Central America, mostly to South American exporters and, to a 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 improved quality and more competitive prices from South American exporters.

In 2017/18, the U.S. also lost market share in Venezuela as well, mostly to South American competitors.

Total use of U.S. rice in 2018/19 is projected at 226.0 million cwt, an increase of 3.0 million cwt from the previous forecast and 6 percent larger than a year earlier. Long-grain total use is projected at 168.0 million cwt, up 1.0 million cwt from the previous forecast—all due to larger domestic use—and 4 percent larger than in 2017/18. Medium- and short-grain total use in 2018/19 is projected at 58.0 million cwt, an increase of 2.0 million cwt from the previous forecast—a result of stronger exports—and more than 9 percent larger than a year earlier.

U.S. Ending Stocks Projected To Increase 11 Percent in 2018/19

U.S. ending stocks of all rice in 2018/19 are projected at 41.5 million cwt, an increase of 1.0 million cwt from the previous forecast and 11 percent larger than a year earlier. 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 18.4 percent, above 17.4 percent in 2017/18.

The stocks situation varies by class. Long-grain 2018/19 ending stocks are projected at 27.1 million cwt, an increase of 1.0 million cwt from the previous forecast and 27 percent larger than a year earlier. The long-grain stocks-to-use ratio is projected at 16.1 percent, almost 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 remain projected at 10.9 million cwt, down 12 percent from a year earlier. The medium- and short-grain stocks-to-use ratio is projected at 18.8 percent, down from 23.4 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.

U.S. 2017/18 Export Forecast Lowered; Imports Raised

There were several revisions this month to the 2017/18 U.S. rice balance sheet. On the supply-side, the 2017/18 total import forecast was raised 1.0 million cwt to a record 27.0 million cwt, 15 percent larger than a year earlier. Through April 2018, total U.S. rice imports on a product-weight basis were up 16 percent from a year earlier. Thailand accounted for most of the increase.

At more than 400,000 tons, U.S. rice imports from Thailand were up 10 percent from a year earlier and the highest on record for the first 9 months of a market year. At 138,500 tons, rice imports from India through April were up 24 percent from a year earlier and the highest on record for the first 9 months of a market year. Nearly all U.S. imports from Thailand and India are aromatic varieties, which are included in the long-grain supply category.

Although a smaller supplier, through April 2018, Brazil shipped 35,300 tons of rice to the U.S., 3 times the level a year earlier. Brazil ships mostly long-grain milled-rice to the United States. By class, U.S. long-grain imports are projected at a record 23.5 million cwt, up 1.0 million cwt from the previous forecast and 16 percent higher than a year earlier.

Medium- and short-grain imports remain projected at 3.5 million cwt, up 9 percent from 2016/17.

On the use side, the 2017/18 total export forecast was lowered 2.0 million cwt to 94.0 million cwt based on expectations that some sales of medium- and short-grain rice to Japan will not actually ship until early in the 2018/19 market year. As of May 31, Japan had more than 102,000 tons of purchased rice that had not yet shipped.

Through April, monthly export data reported by the U.S. Bureau of the Census converted to a rough-rice basis indicated total U.S. rice exports from August 2017 through April 2018 at 67.0 million cwt. Thus, to achieve the 94.0 million cwt 2017/18 export forecast the pace of U.S. shipments will need to increase. Through April 2018, monthly U.S. exports were below a year earlier each month, with differences especially large in September, January, and February.

Milled rice accounted for all of the downward revision in U.S. 2017/18 exports. At 63.0 million cwt, 2017/18 milled-rice exports are 15 percent below a year earlier. By class, the U.S. medium- and short-grain 2017/18 export forecast was lowered 2.0 million cwt to 25.0 million cwt, down 34 percent from a year earlier and the lowest since 2006/07.

Long-grain 2017/18 exports remain forecast at 69.0 million cwt, 12 percent below a year earlier and the lowest since 2008/09. The June 7 U.S. Export Sales included a 93,500-ton correction for previously unreported U.S. long-grain rough sales to Mexico.

On balance, these trade revisions raised 2017/18 ending stocks 3.0 million cwt to 37.3 million cwt, 19 percent below a year earlier. Long-grain ending stocks were raised 1.0 million cwt to 21.4 million cwt, 31 percent below a year earlier. The combined medium- and short-grain ending stocks forecast was increased 2.0 million cwt to 12.4 million cwt, almost 8 percent above a year ago.

2017/18 Long-Grain Season-Average Farm Price Lowered

There were no revisions to the 2018/19 season-average farm price (SAFP) forecasts this month. However, there was a slight revision to the 2017/18 long-grain SAFP. The long-grain 2017/18 SAFP range was lowered 10 cents on both ends to $$11.50-$11.70, based on reported monthly prices through April and expectations regarding prices and marketings the remainder of the market year.

In addition, the U.S. medium- and short-grain SAFP range was lowered 20 cents on both ends to $14.70-$15.30 per cwt, based on revised projected market year marketings by region. Neither the California nor the southern medium- and short-grain 2017/18 SAFP was revised this month. The SAFP revisions by class resulted in a 10-cent reduction on both the high and low ends to the all-rice 2017/18 SAFP to $12.30-$12.70 per cwt.

The 2018/19 long-grain SAFP remains projected at $11.00-$12.00 per cwt, with the midpoint down 10 cents from 2017/18. The slightly lower midpoint in 2018/19 is based on expected larger U.S. long-grain supplies. The southern medium- and short-grain season-average farm price remains projected at $11.20-$12.20 per cwt, with the midpoint 30 cents below a year earlier. The decline is based on larger supplies stemming from increased area.

The California 2018/19 medium- and short-grain season-average price remains projected at $16.50-$17.50 per cwt compared with $16.20-$17.00 for 2017/18. The higher 2018/19 midpoint is based on smaller intended area reported in March by NASS. The U.S. 2018/19 medium- and short-grain season-average farm price remains projected at $14.70-$15.70 per cwt, with the mid-point up 20 cents from a year earlier.

The all-rice 2018/19 season-average farm price remains projected at $11.90-$12.90 per cwt, with the midpoint 10 cents below a year earlier.

In late May, NASS reported the April long-grain price at $12.00 per cwt, up 10 cents from a month earlier and the highest since January 2015. The southern medium- and short-grain April price was reported at $12.80 per cwt, up 50 cents from March and highest since August 2015.

The California medium- and short-grain April price was reported at $17.10 per cwt, down 80 cents from March. The U.S. medium- and short-grain April price was reported at $15.60 per cwt, unchanged from March. The all-rice April price was reported at $12.90 per cwt, up 20 cents from March.

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