The rice market continues to progress since the last report and the emergent underlying theme that seems apparent is stability. The market has most certainly begun to firm in most of the benchmark market indicators. Interestingly, the firmness does not necessarily have a strong upward trend at this point, rather the pricing in most areas are converging toward a common value. While this is a particular oddity in the rice market, it is nonetheless indicative of how the new crop year is shaping up.
Export sales numbers were decreased against the previous report by a significant margin. Overseas buyers appear to have taken the opportunity to wait out the government reports and their aftermath to see if pricing would change significantly. As the adjustments have already taken place, it is very likely that next weeks’ report will see a more positive sales volume.
Vessel loadings have continued apace with prior sales thus far. The troubles afflicting the Mississippi River and its traffic (specifically the ongoing flooding that has brought the barge market to a virtual standstill) can and will have an impact on these figures in the coming weeks in spite of the large sold inventory on the books.
Asian prices have crept up incrementally as well in the major points of origin. While currency fluctuations remain the likely culprit in the weekly change, the marketing year fundamentals should begin to take hold in the near future. USDA held its world market price estimate unchanged since the previous report further reinforcing the since of market consolidation.
In the domestic cash markets, the weather remains a major concern, although growers along the Gulf Coast have caught some respite over the past week with more favorable weather. Even so, this advent may be too-little-too-late as many have already declared prevented planting options in some areas.
Rice News on AgFax
The Upper Delta remains inundated as well, and while growers in that region have a bit more time to work with, the clock is ticking for them also. 2019 is fast becoming a weather driven year and the ultimate planting mix may have more to do with what producers are able to plant as opposed to what the market forces would indicate.
From a marketing standpoint, the cash market seems to be converging on the $10.50/hundredweight level across the board for old crop inventories at this juncture. The futures market managed to eke out additional gains this week with the open contracts on the board all posting positive returns. The volume and open interest numbers have collapsed as compared to last week’s performance suggesting that the market may becoming congested.
Last Friday, the USDA issued its monthly WASDE projection. For rice, the supply side adjustments applied exclusively to the medium/short grain classes and consisted of an increase in imports by .5 million hundredweights. This brings the imports to a record 29 million hundredweights for the current month.
On the demand side, the export figure was decreased by 2 million hundredweights (also as a result of slower medium/short grain numbers). The net impact of these changes resulted in an increase in ending stocks to a 49 million hundredweight carryover which will be the largest in 30 years.
Despite these adjustments the season average farm price was increased by $0.10 per hundredweight at the mid-point of the $11.70-$12.70 projected range on stronger long grain pricing.