Rice Update: Prices on Slow Slide, Exports Off Expectations

The past week in the rice industry has been slow to say the least. There have been very few changes in most of the benchmark areas for analysis and those that did change generally moved downward. 

The export sales report was expected to be rather low for the week. Given the time of year, the proximity of new crop, recent sales volumes, and the general malaise in the market it was somewhat predictable that the tonnage would be off. That being said, the 8,600 MT reported for the week was definitely below expectations.

A long term outlook might suggest that stronger numbers will be in the works, but with the aforementioned factors and the general down tick in the market, it does not seem likely that notable sales will be made in the next few weeks.

Vessel loadings were slightly better as compared to last week and given the low volume remaining to ship, could well be expected to decline again in the next report.

Asian pricing was off for the week in some of the key origins. Specifically, the Thai origin shed a significant amount of value over the past week. It is very likely that global politics and posturing is responsible for much of the move, although other regional and domestic factors cannot be ruled out.

The world market price from USDA for the week reflected the downward trend with a decrease over the values of the previous report for both long and medium/short grain classes of rice.

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The futures market had a bit of action this week as all of the open contracts traded generally negative throughout the week until a last minute rally put the bulls back in control. At Friday’s close, all of the open contracts on the board posted positive gains for the first time in several weeks. It is impossible at this time to suggest that a reversal is in the works but the spread between the futures and the cash markets would indicate that current levels are not sustainable.

In the local cash markets, the atmosphere is quiet from a bidding standpoint and apprehensive from the producers perspective. Crop conditions are progressing well in all areas according to reports and growers are anxious to get the new crop out of the field and into the bins.

The apprehension is mostly due to marketing questions revolving around which direction prices will go. As more information appears at the market, the pricing will become more clear but it will definitely be a while before any predictable volume of information will be available.

Full report.


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