Rice Outlook: U.S. Crop Forecast Raised 4%

There were several revisions this month to the U.S. 2018/19 rice balance sheet. On the supply side, beginning stocks were decreased 5.4 million cwt to 29.4 million cwt based on data from the August Rice Stocks. The 2018/19 U.S. crop forecast was increased 4 percent to 219.5 million cwt mostly due to a larger area estimate reported by NASS.

On balance, these supply-side revisions increased the 2018/19 total supply forecast 1 percent to 275.9 million cwt, up 10 percent from 2017/18. On the use side, total domestic and residual use was increased 2.0 million cwt to 133.0 million cwt.

Although total exports remain forecast at 98.0 million cwt, there was a 1.0-million cwt switch from rough-rice exports to milled rice exports, and 1.0-million cwt switch from medium- and short-grain exports to long-grain exports. Combined, these supply and use revisions increased the 2018/19 ending stocks forecast to 44.9 million cwt, up 53 percent from a year earlier.

The season-average farm price forecasts for 2018/19 were lowered for both classes of rice in both regions.

Domestic Outlook

U.S. 2018/19 Rice Production Forecast Raised 4 Percent…

The 2018/19 U.S. rice production forecast was increased 8.6 million cwt to 219.5 million cwt due to a higher area estimate and a slightly stronger yield. Production is up 23 percent from a year earlier, mostly due to a substantial increase in plantings. Long-grain 2018/19 production is forecast at 159.5 million cwt, up 5.8 million cwt from the previous forecast. Combined medium- and short-grain production is forecast at 60.0 million cwt, up 2.9 million cwt from the previous forecast and 19 percent larger than the 2017/18 crop.

At 2.9 million acres, 2018/19 harvested area is up 3.5 percent from the previous estimate and 22 percent larger than a year earlier. This month’s upward revision in 2018/19 U.S. rice plantings was largely based on FSA certified acreage data. Planting estimates were raised this month for Arkansas, California, Louisiana, and Missouri; but lowered for Mississippi and Texas.

Arkansas accounted for about half the 103,000-acre increase in the 2018/19 planting estimate, with long-grain accounting for the bulk of the upward revision. Medium- and short-grain planting estimates were increased in both California and the South, with Louisiana reporting the largest increase.

Downward revisions for Mississippi and Texas’ plantings were small and all for long-grain.

At 7,563 pounds per acre, the 2018/19 field yield is 40 pounds above the previous forecast and 56 pounds above a year earlier. Despite this month’s upward revision, the 2018/19 yield remains forecast below the 2013/14 U.S. record of 7,694 pounds per acre.

Yield forecasts were raised this month for California, Louisiana, and Texas; but unchanged in Arkansas, Mississippi, and Missouri. The Texas yield was increased 200 pounds per acre, while the California and Louisiana yields were each raised 100 pounds.

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Production forecasts for 2018/19 were raised this month for Arkansas, Louisiana, California, and Missouri; lowered for Mississippi; and nearly unchanged for Texas. Arkansas accounted for 40 percent of this month’s 8.6-million cwt increase in the U.S. 2018/19 production forecast.

Missouri’s 2018/19 crop forecast was increased 13 percent and Louisiana’s raised 9 percent this month. Percentage increases in Arkansas and California’s crops were 3-4 percent, while Mississippi’s production forecast was lowered 7 percent.

…Production Projected Higher in All Reported States

Rice harvested area is projected to be higher than a year ago in all reported States, with Arkansas accounting for 60 percent of the 528,000-acre expansion. At 1.42 million acres, Arkansas’ 2018/19 estimated harvested area is up 29 percent from a year earlier, with long-grain accounting for the bulk of the expected expansion.

Mississippi’s 2018/19 harvested area is estimated at 434,000 acres, up 22 percent from a year earlier. Long-grain accounts for all of the State’s rice production.

Texas harvested area is forecast at 192,000 acres, up 21.5 percent from a year earlier, with long-grain accounting for all of the increase and most of the State’s rice area.

Harvested area in Missouri is forecast at 219,000 acres, an increase of 37 percent from a year earlier, with long-grain accounting for all of the increase and the bulk of the State’s rice production.

In Louisiana, harvested area is projected to increase 10 percent to 496,000 acres, with both long-grain and medium-grain area higher. Long-grain typically accounts for more than 90 percent of Louisiana’s rice acreage.

At 496,000 acres, California’s 2018/19 rice harvested area is 12 percent larger than a year earlier, with medium- and short-grain accounting for almost all of both the expansion and the State’s rice acreage.

Yields in 2018/19 are forecast higher than a year earlier in California and Louisiana; lower than a year earlier in Mississippi, Missouri, and Texas; and nearly unchanged in Arkansas. At 7,000 pounds per acre, Louisiana’s 2018/19 average rice yield is up 4 percent from a year earlier but still well below the 2013/14 record of 7,300 pounds.

California’s 2018/19 projected yield of 8,700 pounds per acre is up more than 3 percent from below-trend yield of a year earlier but still below the 2015/16 record yield of 8,890 pounds per acre.

In contrast, Missouri’s 2018/19 projected rice yield of 7,000 pounds per acre is down 6 percent from the year-earlier record. Yields in Texas are projected to drop less than 1 percent in 2018/19 to 7,200 pounds per acre. At 7,300 pounds per acre, Mississippi’s 2018/19 rice yields are projected to be more than 1 percent below the year-earlier near-record. At 7,500 pounds per acre, the Arkansas rice yield is just 10 pounds above a year earlier but 60 pounds below the 2013/14 and 2014/15 record.

Rice crops in 2018/19 are forecast larger than a year earlier in all reported States, with Arkansas accounting for the bulk of the 41.3 million-cwt U.S. rice production increase. No State is projected to harvest a record crop in 2018/19.

At 106.7 million cwt, Arkansas’ 2018/19 rice crop is projected up 29 percent from a year earlier, almost totally due to expanded area. At 10.1 million cwt, Mississippi’s 2018/19 rice crop is projected up 20 percent from a year earlier, also due to expanded area.

The Texas 2018/19 rice crop is projected at 13.8 million cwt, a 20.5-percent increase from a year earlier, also due to expanded area. Missouri’s projected production of 15.3 million cwt, up 28 percent from a year earlier, is also due to an area expansion. Louisiana’s 2018/19 projected production of 30.4 million cwt is up 15 percent from a year earlier, due to expanded area and a higher yield.

In California, production is projected at 43.2 million cwt, up 16 percent from a year earlier, also a result of both expanded area and a higher yield.

Progress of Southern Rice Crop Remains Ahead of Normal

Harvest of the 2018/19 rice crop is underway in all producing regions and is nearly complete on the Gulf Coast. Progress is ahead of normal in most southern rice growing States. Through September 9, 40 percent of the U.S. 2018/19 rice crop had been harvested, down 1 percentage point from last year but up 4 percentage points from the U.S. 5-year average.

On the Gulf Coast, Louisiana’s 2018/19 harvest was 89 percent complete for the week ending September 9, 1 percentage point behind a year earlier but 2 percentage points ahead of the State’s 5-year average. In nearby Texas, harvest was reported 92 percent complete by September 9, 1 percent ahead of a year earlier and 3 percentage points ahead of the State’s 5-year average.

The harvest completion rates for the Gulf Coast do not include the ratoon crop harvest, which is produced from the stubble that remains in the field after the first harvest. Texas and Southwest Louisiana are the only U.S. rice growing regions capable of producing a ratoon crop, due to their longer growing seasons.

In the Delta, Arkansas’ 2018/19 crop was reported 33 percent harvested by September 9, behind last year’s pace of 38 percent but 3 percentage points ahead of the State’s 5-year average. Missouri’s 2018/19 harvest was reported 9 percent complete by September 9, slightly ahead of a year earlier but 2 percentage points behind a year earlier. Mississippi’s 2018/19 was reported 65 percent complete by September 9, well ahead of both last year’s pace of 49 percent and the State’s 5-year average of 31 percent.

California’s 2018/19 harvest was reported 2 percent complete by September 9, 1 percentage points ahead of a year earlier but 1 percentage point behind the State’s 5-year average.

U.S. 2018/19 Total Rice Supplies up 10 Percent from 2017/18

There were several supply side revisions to the 2018/19 U.S. rice balance sheet this month, a result of both the revised crop forecast and data from the August 24 NASS Rice Stocks.

First, the 2018/19 U.S. rice carryin was lowered 5.4 million cwt to 29.4 million cwt based on the August Rice Stocks, which indicated substantially lower stocks than previously forecast. The 2018/19 carryin is 36 percent below a year earlier and the smallest since 2004/05.

By class, long-grain carryin is estimated at 20.3 million cwt, down 3.0 million cwt from the previous forecast and 34 percent below a year earlier. Combined medium- and short-grain carryin is estimated at 7.6 million cwt, down 0.2 million cwt from the previous forecast and 36 percent below a year earlier and the smallest since 1999/2000.

Second, the 2018/19 U.S. rice crop forecast was increased 4 percent to 219.5 million cwt due to larger area and a slightly higher yield. The long-grain 2018/19 crop projection was increased 4 percent to 159.5 million cwt and the medium- and short-grain crop forecast was increased 5 percent to 60.0 million cwt. Imports in 2018/19 remain forecast at a record 27.0 million cwt, fractionally above the year-earlier revised level.

Long-grain 2018/19 imports remain forecast at a record 23.5 million cwt, also fractionally above the year earlier revised level. Thailand, India, and Pakistan are expected to again account for the bulk of U.S. long-grain rice imports, shipping almost exclusively aromatic rice varieties.

Medium- and short-grain imports remain projected at 3.5 million cwt, also slightly below the year-earlier revised estimate. Specialty rice from Thailand accounts for most of U.S. medium- and short-grain rice imports. China has recently shipped much smaller quantities of medium- and short-grain rice to the United States, with much of it going to Puerto Rico.

Total U.S. rice supplies in 2018/19 are projected at 275.9 million cwt, up 1 percent from the previous forecast and nearly 10 percent larger than a year earlier. The year-to-year supply increase is the result of a much larger crop more than offsetting a big decline in carryin, with imports nearly unchanged.

Long-grain supplies are projected at 203.3 million cwt, up 1 percent from the previous forecast and up almost 12 percent from a year earlier. Medium- and short-grain supplies are forecast at 71.2 million cwt, up 4 percent from last month’s forecast and more than 5 percent larger than a year earlier.

U.S. Exports Projected To Increase 13 Percent in 2018/19

Total domestic and residual use of rice in 2018/19 is projected at 133.0 million cwt, up 2.0 million cwt from the previous forecast but more than 1 percent below the year-earlier revised estimate. This is the third consecutive month of an upward revision in the 2018/19 domestic and residual use forecast and was primarily based on the larger supplies.

In addition to food and industrial uses of rice—primarily as pet food and beer—domestic and residual use accounts 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 103.0 million cwt, an increase of 1.0 million cwt from the previous forecast and 4.5 percent larger than the revised 2017/18 level. Medium- and short-grain domestic and residual use is projected at 30.0 million cwt, up 1.0 million cwt from the previous forecast but still 17 percent below the abnormally high level for 2017/18.

Total U.S. rice exports in 2018/19 remain projected at 98.0 million cwt, up 13 percent from the year-earlier revised estimate. On an annual basis, the expected increase in 2018/19 exports is based on larger supplies, more competitive U.S. prices, and weaker shipments from Australia and Egypt—top competitors in the global medium- and short-grain market.

U.S. rough rice exports in 2018/19 are projected at 33.0 million cwt, down 1.0 million cwt from the previous forecast but up 15 percent from the revised 2017/18 estimate. The downward revision was based on expectations of little, if any, shipments to Turkey, once a top market for U.S. medium-grain rough-rice, due to extremely high tariffs.

On an annual basis, the U.S. is expected to boost sales to traditional U.S. long-grain rough-rice markets in Latin America, primarily Mexico, Central America, and Venezuela. The U.S. has recently lost market share in these markets to more competitively priced South American exporters.

U.S. milled rice exports (combined milled and brown rice exports on a rough basis) in 2018/19 are projected at 65.0 million cwt, up 1.0 million cwt from the previous forecast and 11 percent above the year-earlier revised estimate. The slight upward revision is largely based on recent declines in U.S. prices, making the U.S. more competitive.

On an annual basis, Latin America (primarily Haiti) 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 shipments purchased in 2017/18. Haiti is expected to remain the largest market for U.S. long-grain milled rice.

U.S. long-grain exports in 2018/19 are projected at 69.0 million cwt, up 1.0 million cwt from the previous forecast based on slightly lower U.S. price forecasts for 2018/19. U.S. long-grain exports are forecast 9 percent above the year-earlier revised estimate, primarily due to lower U.S. prices and larger supplies. Latin America, the largest market for U.S. long-grain rice exports, is expected to account for most of the increase. Larger U.S. supplies and more competitive prices are behind expectations of stronger U.S. exports to Latin America.

Combined medium- and short-grain U.S. exports are projected at 29.0 million cwt, down 1.0 million cwt from the previous forecast based on expectations of little, if any, sales to Turkey. Despite the downward revision, U.S. medium- and short-grain exports are forecast up 22 percent from the 2017/18 abnormally low level.

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Some of the expected increase in 2018/19 is due to shipments to Northeast Asia that were purchased in 2017/18. In addition, the United States is likely to pick-up additional sales in parts of the Middle East other than Turkey, due to Egypt’s tight supply situation and decision to import rice, and a second consecutive weak crop in Australia.

Total use of U.S. rice in 2018/19 is projected at 231.0 million cwt, up 2.0 million cwt from the previous forecast and 4 percent larger than a year earlier. Long-grain total use is projected at 172.0 million cwt, up 2.0 million cwt from the previous forecast and 6 percent larger than in 2017/18. Medium- and short-grain total use in 2018/19 remains projected at 59.0 million cwt, 1.5 percent smaller than a year earlier, a result of smaller domestic use.

U.S. Ending Stocks Projected To Increase 53 Percent in 2018/19

U.S. ending stocks of all rice in 2018/19 are projected at 44.9 million cwt, an increase of 3 percent from the previous forecast and 53 percent larger than the year-earlier revised level. The substantial rise in ending stocks in 2018/19, despite stronger total use, is due to a 23-percent increase in production. The 2018/19 stocks-to-use ratio is projected at 19.4 percent, well above the abnormally tight 13.2 percent in 2017/18.

The stocks situation varies somewhat by class. Long-grain 2018/19 ending stocks are projected at 31.3 million cwt, an increase of 2 percent from the previous forecast and 54 percent larger than a year earlier. These are the largest long-grain ending stocks since 2010/11. The long-grain stocks-to-use ratio is projected at 18.2 percent, up from just 12.6 percent in 2017/18. Ending-stocks and stocks-to-use ratio of these levels are expected to put downward pressure on long-grain prices during the 2018/19 market year.

For medium- and short-grain rice, 2018/19 ending stocks are projected at 12.2 million cwt, up almost 28 percent from the previous forecast and 59 percent larger the year-earlier abnormally low level. The medium- and short-grain stocks-to-use ratio is projected at 20.6 percent, up from just 12.8 percent in 2017/18.

U.S. 2017/18 Ending Stocks Estimate Lowered 16 Percent

Year-end stocks and trade data resulted in several revisions to the 2017/18 U.S. rice balance sheet. The largest revision was a 5.4-million cwt reduction in the ending stocks estimate to 29.4 million cwt based on data reported by NASS in the August 24 Rice Stocks. By class, long-grain ending stocks were lowered 3.0 million cwt to 20.3 million cwt, and medium- and short-grain ending stocks were reduced 0.2 million cwt to 7.6 million cwt, the smallest since 1998/99.

Stocks of broken kernels, not classified by grain length, are estimated at 1.4 million cwt, 2.1 below a year earlier. Rice stocks were lower than a year earlier in all reported States except Texas, with Arkansas holding 49 percent of all U.S. rice stocks on August 1. California, with 6.1 million cwt of rice, and Texas, with 4.9 million cwt, account for most of the remaining U.S. rice stocks on August 1.

On the supply side, all-rice imports were lowered 0.1 million cwt to 26.9 million cwt, with the long-grain estimate lowered 0.2 million cwt to 23.34 million cwt and the medium- and short-grain import estimate raised fractionally to 3.54 million cwt.

All rice exports were increased 0.5 million cwt to 87.0 million cwt, with long-grain increased 0.3 million cwt to 63.3 million cwt and medium- and short-grain exports raised 0.2 million cwt to 23.7 million cwt. All trade revisions were based on Census trade data through July. These trade and stock revisions resulted in a 4.8-million cwt increase in the 2017/18 domestic and residual use estimate to 134.8 million cwt.

Long-grain 2017/18 domestic and residual use was increased 2.6 million cwt and medium- and short-grain 2017/18 domestic and residual use was boosted 2.2 million cwt to 36.2 million, the highest since 2004/05.

U.S. 2018/19 Season-Average Farm Prices Lowered Again

This month, USDA lowered its forecasts for 2018/19 season-average farm prices for both classes of rice in both regions, mostly based on larger supplies and recent price movements. The 2018/19 long-grain SAFP is projected at $10.30-$11.30 per cwt, down 20 cents on both the high and low end of last month’s range, with the midpoint down 90 cents from 2017/18.

The Southern 2018/19 medium- and short-grain season-average farm price is projected at $10.60-$11.60 per cwt, also down 20 cents on both the high and low ends of last month’s range. The 2018/19 midpoint is $1.00 below a year earlier.

The California 2018/19 medium- and short-grain season-average price is projected at $15.80-$16.00 per cwt, also down 20 cents on both the high and low end of the previous forecast range. The midpoint is just 30 cents below the 2017/18 SAFP.

The U.S. 2018/19 medium- and short-grain season-average farm price is projected at $14.20-$15.20 per cwt, down 20 cents on both ends of the previous range. The 2018/19 mid-point is 30 cents below a year earlier. The all-rice 2018/19 season-average farm price is projected at $11.20-$12.20 per cwt, also down 20 cents on both ends of the previous range. The midpoint of the 2018/19 all rice SAFP is 90 cents below a year earlier.

Full report.


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