Rice Market: Above Average Yields in the Gulf; Quality Harvest Moving North

©Debra L Ferguson Stock Photography

There have been a few interesting developments in the market since the last report but the overall atmosphere remains calm and business as usual. The export sales report for the week posted healthy sales for the first time in many weeks. Having been below 30,000 MT for so long, the most recent 84,500 MT of sales looks very positive.

Continued sales of similar volume will be necessary to help cope with the overall size of the new crop harvest, but at this point the year is off to a good start. Vessel export tonnage also demonstrated some larger volume and with the quantity on the books to be shipped, should hold fairly constant for a week or two.

Asian pricing noted some minor reductions in price since the last report. Benchmark origins generally fluctuated down in value but the magnitude and direction suggests that this is primarily due to exchange rates.

USDA’s world market price estimate was unchanged from last week, and with the stable market undertone, will likely see few changes before the next report.

In the domestic cash market, buyers are becoming more active from a bidding standpoint as compared to the last few months. Sellers on the other hand are not particularly interested in the current pricing and only moderate volumes are being moved at this time. Those trades that are taking place are generally growers who either do not have storage or are making space for new crop.

New crop harvest is beginning to wrap up in Texas and Louisiana. First crop yields are being reported around 9,000 pounds per acre on average with hybrids out yielding conventional varieties in most areas. Quality appears to be generally good to above average. Storage and drying space has become an issue in Texas as much of the 2017/18 crop has yet to move which is causing some frustration at the farm level.

Mississippi and Arkansas have experienced rainfall which will push harvest back somewhat although most producers expect to be in the fields by next week or as soon as feasibly possible. In Missouri, rice is reported to be in good condition with producers preparing to head to the fields within the next 10 days.

The overall size of the crop in Northeast Arkansas will be interesting to see given the magnitude of acres and the early yield projections.

In the futures market, traders have been rather active over the week. At the weekly close, the open contracts on the board closed generally higher than last week’s values with gains consistently hovering around the 1.6% range. The nearby September contract was the exception with an almost 5% gain as the spread between it and the November contract has narrowed significantly.

More information will be available as the yield data comes in over the next few weeks but until then, the year is off to a good start.

Full report.


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