Another week has passed in the rice market and there has been minimal change in the market conditions over the last report. In fact, the weather seems to dominate conversations more so than market conditions at this point.
With wet and cold conditions spread across the southern rice growing regions, growers remain very far behind on fieldwork. Even as the calendar would suggest that planting time for the 2019 crop is just around the corner, the dearth of preparation and the weather in general puts that time frame well past the optimal window. Talk of prevented planting in many areas has also become commonplace.
Without a doubt, rice will be planted as it always has been, but the size and quantity of the new crop is undoubtedly being impacted as we speak.
From a marketing standpoint, many growers are having difficulty getting excited about new crop due to pricing. With the large carryover inventory from 2018 and the current stagnant pricing forecasts, producers are having to sharpen their pencils very often as they work to determine what the planting mix will ultimately be.
In other news, USDA has gotten its export sales system back online and up to date with the current numbers. For several weeks, we have been discussing the prospective health of the export market and have been pleased to have our projections confirmed by fact.
Rice News on AgFax
In truth, the export numbers look better in retrospect than was initially expected. The average reported sales volume of the last three weeks was in excess of 168,000 MT with the lowest reported value being approximately 88,000 MT. Vessel loadings posted similar positive values over the same time frame. With the monthly WASDE report due out imminently, the demand side numbers should see some adjustments as a result.
Asian pricing has been very much sideways since the last report. The price fluctuations for the benchmark origins are generally attributable to the changes in exchange rates. Meanwhile, the world market price estimate has remained unchanged from last week’s projection as well.
The other good news in the market (aside from the export numbers), is the continued surge in futures market prices. All of the open contracts on the board posted positive gains in excess of 1.1%. This bull rally that was noted in last week’s report is very welcome and will hopefully continue into next week as well.