The rice market this week has remained quiet and despite significant futures activity, very little has changed in the cash market. With the government shutdown still in full swing, there is nothing concrete to report from the standard benchmark indicators. Speculation about the values is rampant, particularly the adjustments to the January balance sheet (WASDE) but without any confirmation, it is all still speculation.
Expected revisions to be made include the production numbers (yield estimates and total production to reflect second crop), export numbers (to reflect changes in sales) and the resultant impact on ending stocks. Any of the above adjustments will also translate into a revision to the season average farm price. Additionally, these adjustments will cause the market to shift trajectory, either into a bull run, or a bear slide, depending on the values.
IF the report holds true to expectations, a bear slide is the probable direction based on strong production and only moderate export numbers. This being said, if the export numbers of the past month have continued to surge, then they could well offset the increase in supply to have the opposite effect.
In other areas, given the general lack of movement in the cash market and the stability of Asian pricing, the world market price estimate can, with a degree of certainty, be held unchanged. Asian prices seem to be fluctuating very little and primarily as a result of exchange rate volatility. There is nothing on the horizon that would indicate that these values will change significantly in the near future.
Domestically, the cash market has also remained in stagnation. Growers seem have reached the lower boundaries of their acceptable price ranges, and at this time are not coming off of those numbers. Conversely, buyers appear to be marginally lower than the seller marketing ideas with the end result of minimal business being done.
The positive outlook this week comes in the form of a surging futures market. This week saw the board close in the black yet again, with individual contract gains ranging from 3.8%-4.0%. Fundamentally, these moves are baffling considering the macro level picture, but the increase in futures pricing will help those growers with basis contracts and also helps construct the case for stronger pricing. Hopefully by the next report there will be more information to analyze.