Rice Market: Flooding Complicates Export Shipments

Very little has changed in the rice world since last week’s report, although the stage seems to be getting set for some upside moves in most of the key market areas. The export sales numbers released this week from USDA were significantly more positive as compared to the previous values. Notable tonnage saw commitments, and while the ability to ship out of the South is still in question, the overall trend is positive.

Given current domestic prices, US origin rice seems to be becoming much more competitive on a global level. If this spread continues to hold at the current levels or even collapses a bit more, then the export bookings could get even larger.

Vessel loadings was up slightly higher than last week’s values. As has been mentioned previously, congestion along the Mississippi River due to flooding has made it difficult to ship ocean going freight, which has put more pressure on rail as the primary means of moving product out of the Delta. Until this situation resolves itself, the export tonnage may remain marginal but the stronger purchases are definitely encouraging.

Asian pricing has been a mixed bag over the week. Thai prices saw notable gains in pricing while the Myanmar origin noted some break to the downside. These price shifts were well beyond simple currency fluctuations at this time. The magnitude of the changes seems to indicate that some fundamental factors are coming into play in the Asian region and the next few weeks will be indicative as to what and where these factors originate.

USDA has held its world market price estimate constant for the week. It is likely that the next report will note some upward movement based on the aggregation of factors.

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In the domestic market, pricing has remained fairly stable across the board. For weeks, the bigger factor in farm country has been the weather. Growers along the Gulf Coast in Texas and Louisiana have finally gotten a much needed respite and after almost a week of favorable weather, some fields are being prepped for the coming year. Row crops have seen a spurt of activity as well with a significant amount of corn being planted during the interim.

Unfortunately, the Upper Delta has not had the break as unseasonable rainfall and now late season snow melt continue to flood the Mississippi River. This situation bears close attention as it will have an impact on long term planted acres for new crop.

The futures market has had yet another positive week with all of the open contracts on the board posting gains ranging from 2.25%-3% over last week’s values. The only additional news of note from the futures perspective is the transition of the nearby contract into the May’19 contract. While the overt factors have yet to significantly change, the market undertones have definitely taken a more bullish direction.

Full report.

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