Rice Market: On-Again, Off-Again Exports; Traders Await WASDE

The rice market has remained quiet over the course of the week as the early year buying doldrums continue. USDA has still not brought its weekly export reporting system up to date, and although it is making progress, is still several weeks away. Thus far, expectations with respect to export volumes seem to be validated as the data becomes available but it is always nice to have confirmations when making market analyses in this regard.

That being said, the export market seems to be continuing apace, and as the numbers are revealed, it is probable that the on-again off-again buying pattern will be distinguishable. Similarly, a fairly consistent vessel loading schedule can also be anticipated given the market undertone and pricing. It will be interesting to note the validity of these projections in the coming weeks.

With March around the corner, another installment of the WASDE report is in the offing and those numbers should reflect any changes in exports at the very least. The bullish undertone that was anticipated in last week’s report seems to have materialized over the past few days regardless. USDA has raised its world market price estimate marginally, but stronger market factors are definitely at play.

Asian pricing has been mostly sideways (as has been the case for some weeks now) with the price changes largely related to changing currency rates. The more interesting moves however have been in the domestic cash market with price upticks in several key areas. 

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Texas noted the largest gain with lots gaining $0.50 or more per hundredweight. This is reflective of the burgeoning export market that has developed there and the reduced pressure to sell at alternative lower prices set by domestic mills. The other states have seen some boost in pricing as well; either a result of surging futures prices or shifts in basis numbers.

Across the rice growing region, weather remains the biggest hurdle to overcome with regards to new crop as the rains continue to pound rice producers into submission. Very little field work has been accomplished to date in any area, and for those more southern growers, the time is running out before yields become impacted.

The futures market also saw continued gains over the week. All of the open contracts on the board posted gains between 1.7% – 2.3%. As the nearby March ’19 contract prepares to give way to the May’19 contract in the nearby slot, some softness may be seen as the last positions are rolled over, but the continued market strength is still anticipated – at least until next week.

Full report.

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