The rice market has begun to see some movement this week, especially in the wake of last week’s WASDE report which was unsurprisingly bearish for the market. Export sales reporting have still not caught up with the actual volumes and USDA suggests that it should be caught up with the reporting system over the next few weeks.
Speculation indicates that exports continue apace with “normal volumes” which would be in the range of 40,000-60,000 MT on average. Again, this is only speculation but that appears to be what the market is indicating at this time.
Asian prices remain virtually unchanged from the previous report or the several reports prior. This arena has seen very little price movement in either direction with the minor weekly fluctuations attributable to currency market adjustments.
The USDA world market price estimate was a mixed bag this week with decreases in the long grain values and increases in the medium/short grain class. This would appear somewhat odd given the stagnant nature of the market, however the softer undertones in both the futures and domestic long grain cash markets seem to reinforce this conclusion.
The domestic cash markets seem to be converging toward the futures market values in most areas as pricing has weakened somewhat across the Upper Delta. Interestingly, Texas has seen a bit of a rally over the past week as supplies of cheaper rice dwindle, forcing buyers to more aggressively bid to procure volume. It would seem that that higher quality lots are being held onto until supplies tighten sufficiently and prices improve, while the “lower quality” lots are commanding higher and higher premiums to extract them from first hands.
Rice News on AgFax
The futures market this week saw the bears take the reins and even make new lows over the course of the week. The open contracts on the board posted net losses of 3%-4% over last week’s values. From a technical standpoint, an upside bounce may be in the offering, but the magnitude and longevity remain big question marks.
As has been mentioned, the USDA released its first WASDE report last week. There were no major surprises in this installment as such. On the supply side, the average yield was increased by 170 lbs. per acre and production was increased by 6 million hundredweight over the previous month, primarily attributed to long grain production.
On the demand side, domestic usage was increased by 2 million hundredweights while exports were increased by 1 million hundredweights over the previous projection. The net impacts of these revisions was a 2.9 million hundredweight increase in ending stocks and no projected change in the season average farm price.