It has remained fairly quiet in the rice market since the last report with only minor fluctuations in any of the benchmark indicators and no directional change in the fundamental market undertone. Export sales for the week saw a modest recovery over the lower values noted in the past several reports at a respectable 102,000 MT.
As was noted last week, the weekly average remains very healthy and will help to boost the demand numbers on the future WASDE reports as the are compiled. Given the projected size of the new crop (per USDA) and the ramifications that this implies, additional demand side factors will be highly welcomed.
Vessel loadings saw a decrease from last week’s tonnage. Again, with the constraints on the Mississippi River currently in place and with a longer expectation before they are alleviated, this reduced tonnage is not terribly surprising. Continued exports against old sales are expected to continue and will pick up volume as the more viable transit routes again become functional.
International pricing has seen very little movement in the past week as well. The moderate gains and losses against the benchmark Asian origins are generally attributable to the fluctuations in currency exchange rates at this time. The spread between U.S. and Asian origins remains wide enough to impair the global competitiveness of the former.
USDA did not change its world market price estimate this week and if the market continues at its current trajectory, no major changes to this estimate are anticipated in the next report.
Domestically, the U.S. cash market has seen no real changes with the exception of those indicators that are pegged against an underlying futures contract. Much needed precipitation has fallen across the lower Gulf Coast in Texas and Louisiana which will help to get the new crop off to a good start.
The futures market posted moderate gains over last week’s close, with all of the open contracts on the board realizing gains between 1.3% and 1.8% respectively. The deferred contracts experienced the greater gains, which suggests that the traders in the pit are not completely confident in the numbers that USDA is publicizing as to the size of the new crop harvest.
It is too early to indicate that the market has fundamentally shifted off of the lows seen in the past week or two, and long term bullish positions should be taken with an extra share of caution.