Rice Market Takes Lack of USDA Reports in Stride

©Debra L Ferguson Stock Photography

It has remained very slow in the rice industry over the past week with only minor changes in price and even fewer changes in market fundamentals. With the government shutdown still in full effect, the standard publications that are used for federal information remain unavailable. 

To that effect, the market itself it essentially operating “blind” with respect to export volumes and crop projections. The trade seems to have taken these setbacks in stride and business has continued despite the lack of Federal level information.

Export sales have continued to move, and while there are no official numbers to report, industry sources seem to suggest that sales and loadings have continued apace with the earlier trends. Similarly, the world market price estimate has not been updated but with the miniscule changes in the underlying factors, it is reasonable to expect that the WMP numbers will not show any major adjustments when the government resumes its role.

Overseas Asian benchmark prices have generally been sideways with the up and down movement that is generally associated with currency exchange rates. Domestically, U.S. cash prices are holding moderately steady across the rice growing regions primarily due to producers not being willing to trade at the lower levels.

For some growers the time to cash flow has come as they work to lock down operating notes for the coming year or to handle accumulated bills. As such, small volumes are moving at the indicated levels. The remainder of rice in first hands appears to be rather firm as producers are content to hold out for higher prices. 

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Looking forward to new crop, weather remains a large spectre across the South since very little fieldwork has been done to date. Some additional drying days would be particularly welcome as they would provide the opportunity for growers to get into the fields and prepare the ground.

If there is no abatement, prevented planting has already been mentioned as a potential option for many acres.

The futures market has had a tough week with the bears taking the lead and handling the bulls somewhat roughly. The January ’19 contract exited the board last week making the March ’19 the new nearby contract. This transition was responsible for some of the action over the week as the traders finalized their positions but after several weeks of rallying, it was arguably time for a correction.

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