- Thai rice prices are holding steady at $402 MT for White 5%. Vietnam is $2 below that and India is at $397 MT. The international markets are firm, awaiting harvest of the summer crops.
- Demand is good. USDA reported 27,600 tons sold last week and 44,200 shipped. That is a lot with only about 15% of the crop harvested and no rice left from last year’s crop.
- Thailand now expects to export 11 million tons this year, up from 9.7 million last year. Iraq bought 30,000 tons from the U.S. and 30,000 from Uruguay on this last tender. That was a pleasant surprise. We feel like it takes significant political pressure to make these sales.
- The Trump administration believes that the Mexico part of NAFTA negotiations will be finished today. They will then focus on Canada next week. Mexico is the #1 buyer of U.S. Rice and the #2 buyer of U.S. corn.
- The Chinese negotiators are returning next week with a top-level decision-maker, so hope springs eternal that we can work out a soybean deal in September. The reality is that China is already buying U.S. beans. The second shipment of American soybeans is arriving in China today.
- Mexico is still buying U.S. rice and never ever slowed down.
- Weather still gets a vote on the harvest quality of US rice, but I hear, except for bad grass in Arkansas, most rice looks good. We also did not have a lot of adverse weather that would cause poor milling yields up to this point.
- World demand is good, our crop looks good. We will sell a lot of rice.
- Rice futures topped out right above $12 CWT. We shipped all but 35 registered receipts. Demand is still very robust. However, we knew that as soon as a little rice was harvested in Texas and South Louisiana we would see selling in the September contract.
- We have heard that the “Manipulators” wanted September futures under $10 CWT. Well, they put them there in 10 days.
- Even though we have never slowed in selling rice to Mexico, the news that a NAFTA agreement was near and the news of a sale to Iraq gave us a good rally.
- Where do we go from here? If harvest proceeds with great yields and no weather problems, we will head back to $10 CWT. But if there are more big tenders and weather problems in the U.S., Thailand or India, we will sail up through $11.00 CWT. It will be hard to have large deliveries on August 31 with 35 contracts registered.
Markham B. Dossett was a charter member of the New Orleans Commodity Exchange. He has traded rice since early 1981. He owns Talon Asset Management LLC where he hedges rice, soybeans, corn, wheat, cotton and cattle for producers in the South and Southwest.
** Futures and options trading involve significant risk of loss and may not be suitable for everyone.