The rice market seems to have maintained its firmer undertone since the last report, in spite of a net decline in several of the benchmark areas. Export sales for the week noted a significant decrease from last week’s 200,000 MT volume at a reported ~57,000 MT for the week. As a percentage change, the magnitude is very large, but it is important to keep in mind that the previous week’s sales were of a much larger magnitude than is normal.
The current figures, while not quite where the trade would like to see them, are still much more respectable than the sales figures reported earlier in the year. Vessel loadings were also down from last week but given the difficulties in loading large quantities on the Mississippi River at this point, are still far from poor.
Asian benchmark pricing has seen a generic increase in value over the week. These changes are largely due to changes in currency valuation, although the underpinning fundamentals that have been commented on in weeks past are definitely still at play as well. The spread between these Asian origins and U.S. prices have narrowed slightly which helps to boost the competitiveness of U.S. rice as well.
USDA’s world market price estimate was increased for both classes of rice over last week’s value. The increase was by $0.10 for the long grain class and $0.11 for the medium/short grain classifications. This change was not very surprising and was largely predictable given the static nature of the WMP estimate for the past several weeks and coupled with the stronger undertone of the global marketplace that has emerged during that time.
The domestic cash market has remained generally unchanged in all respects since last week’s report. The only pricing changes came as a result of shifts in the underlying futures market values in the nearby contracts. The basis numbers have generally stayed the same in most areas and specifically, growers are not attracted to these pricing levels.
Rice News on AgFax
On the production side, growers in most areas have been able to get into the fields and get much of the new crop in the ground over the last few weeks as more favorable weather has provided an opportunity to get caught up. In contention to the situation over the past few months, producers in these areas could actually use a bit of rain over the next few days to get the crop established and the new crop started.
The futures market over the week has seen the bulls give way to the bears, with all of the open contracts on the board posting losses over last week’s close. Losses ranging from 0.1% to 3.4% were noted, with the greater volatility being seen in the nearby delivery contracts.
This past Friday, USDA released its annual Prospective Planting Report which held some surprises for rice. According to the USDA, (all) rice acreage is expected to decrease for Arkansas, California, and Louisiana, while Mississippi, Missouri, and Texas are expected to gain acreage over the 2018 plantings. The total rice acreage for the U.S. is estimated to decrease by 3% or 76,000 acres from the 2018 total.
This is surprising in that the industry generally is of the belief that the rice area in all of the Southern states will note some decrease. It is important to keep in mind that the Prospective Planting Report is developed from survey data collected earlier in the year and does not necessarily reflect the realities of the producer’s planting intentions. With this bearish report at odds with the projections of the industry participants, the June Acreage report will probably be difficult to reconcile against this early snapshot of U.S. agriculture for the 2019 crop.