Dossett on Rice: Texas Needs Rain Break; Futures Promising

Young furrow planted rice field, pre-flood. Photo: By Dan Roach, Ext. Associate, Mississippi State University

The Philippine tender for 203,000 MT for October 26th  has been postponed to November 6th. Thailand is really pushing new rice sales in an attempt to achieve an 11 million ton export target.  Thai prices dipped this week down to $403 MT after holding in the $408-$409 range for 5 weeks.  

India prices are steady to a little lower. The Indian EPA has new guidelines that will shut 500 rice mills on November 4th.

Urguguay planted rice acreage is down 15% year on year with planting wrapping up next week.

Domestic Milled Rice Prices:

  • Arkansas – $23.50
  • Louisiana – $23.50
  • Texas – $24-$26 –  Rains have continued to be a problem for the Texas second crop.  We just can’t get a break from the rain.

FUTURES MARKET

Surprise, Surprise!  The rice futures market had a selloff right before FND for the November contract.  There are few years in my memory that the “swoon” does not come like clockwork.

We have had 176 contracts registered this week and have delivered and stopped 199.  We thought there might be 500 contracts registered, so the smaller numbers are bullish.  The expected needs of Iraq, Indonesia, Iran and Philippines have instilled optimism in the exporters here and abroad.

The technical picture for futures is also very promising.  If we get through the November deliveries without a major dip below $10.40 in the January contract we will have set up for an inverted Head & Shoulders pattern and a projection above $12.00 CWT.  I favor the long side of this market.

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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