Dossett on Rice: Demand Looks Robust for Futures Market

Rice harvest. ©Debra L Ferguson Stock Photography

CASH MARKET

India and Thailand have maintained steady rice markets for 2 weeks. White 5% is holding at $403 MT in Thailand and $382 in India. Vietnam and Pakistan are $395. Iraq passed on the most recent U.S. offer. 

U.S. Harvest

The U.S. harvest was moving rapidly until the rain came. The last 15% of Texas crop is in limbo as we wait for the tropical depression to move out. Arkansas was hampered by excessive rains in last 10 days but is drying out now. If this crop is going to live up to expectations we need to get those Arkansas acres in the bin soon. Mississippi is 95% finished and all is well on the east side of the river. We are awaiting more news about these fields in Arkansas that had high grass problems, some may be abandoned. Rice is being sold for $11.00 CWT in Texas. No sales in Arkansas at this time.

FUTURES MARKET

November rice futures have found a home between $10.20 and $10.90. It certainly helps to have only 54 receipts remaining in certified warehouses and only 36 contracts delivered against the SEPT contract.

The “Manipulators” that I have referred to in the past have a hard time driving the market down when there are no contracts to deliver and we are having weather problems in Texas and Arkansas. On Friday, September 14th, we are having a little sell-off as the large merchants like to keep the futures at a 75 cent to dollar discount to the cash market.

I believe demand will continue to be robust worldwide. While everyone has focused on North Carolina and Texas weather, we have had a major typhoon in the Philippines and then China. Yes, we have more rice in America this year but if we have more demand, prices can still rally.

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.


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