Rice Market: Overseas Buyers Still Active

Photo: Fred Miller, University of Arkansas

The weekly export sales figure is reported at a tiny 16,600 MT for the week (a new marketing year low), but after the 100,000+ MT volume reported last week, this is not entirely surprising. 

Overseas buyers have continued to purchase on demand. In addition to this buying habit, they were able to take advantage of the currency exchange rates during the past 2 weeks as well. Having fulfilled their needs for the next several weeks, it is possible that continued low numbers will be seen through the beginning of 2019. That being said, an argument can also be made that buyers will need to finish acquiring inventory for the 2018 calendar year and may purchase some extra tonnage.

Vessel loadings were respectable this week which suggest that old purchases are continuing to leave the country that mills are still running apace with demand. Benchmark Asian pricing has seen very little movement since the previous report. All major origins are at approximately the same levels that were indicated two weeks ago. This underscores the lethargy in the global rice market as a whole. To emphasize this, the USDA’s world market price estimate has remained unchanged for the third week in a row. 

Domestically, the cash markets have also been quiet as growers in the South wrap up the final lots of second crop harvest. Texas and Louisiana report field yields between 3,200 and 4,800 pounds per acre. Second crop quality has yet to be determined but preliminary estimates suggest that quality will be better than expected in most areas. The remainder of the rice growing regions have completed harvest and are getting ready for the holidays. In the futures market, rice has had a generally positive week.

All of the open contracts on the board posted positive gains since last Friday’s close. With the year end festivities looming, the rice industry is getting ready to close out a fundamentally tough year. As it stands now, it is unlikely that any major surprises are on the horizon to change market conditions prior to 2019. While this could be interpreted in a negative fashion, the reality is that after the hardships encountered during the past season most growers are overdue for a well earned break.


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