The rice market continues to be very quiet, particularly from a marketing standpoint although the new crop plantings are in full swing across all of the Southern rice growing regions. Export sales for the week were reported at around 65,000 MT which is a significant net decrease from the previous report but is still within the acceptable range from a healthy market perspective.
Continued sales are crucial to moving the 2018/19 crop still in storage in order to make room for new crop in the next few months. As the transportation glut decreases, the market will hopefully continue to see positive sales momentum. This is particularly true given the pricing differential at the grower level. Vessel loadings were notably increased over the previous report and give some indication that the sold product is moving through the system. Maintaining a solid pace throughout the process is important to the long term market outlook as well.
Asian prices this week were mixed, with minor adjustments in all of the benchmark origins. Currency changes are again responsible for the lion’s share of the fluctuations, particularly at the regional level. Underlying fundamental factors seem to be relatively unchanged and no major shifts are anticipated at this time. USDA’s world market price estimate remained unchanged again this week. This marks the third week of price stagnation and given the current market scenario, is likely to remain unchanged in the coming week as well.
In the domestic market, very little rice is trading at current levels. As has been mentioned in previous reports, this is partially due to the current price of rice with the other component being the amount of rice in first hands left to sell. It is generally accepted that farm level pricing will need to appreciate significantly in order to acquire the remaining volumes.
Rice News on AgFax
Planting is well underway with a large percentage both planted and emerged at the southern extremity of the rice growing region (Texas and Louisiana). Meanwhile further north, weather delays are reported as being the primary culprit impacting the new crop planting season. Trade based acreage estimates continue to diverge widely from those posted by USDA last month and continued weather delays may well force growers to consider alternatives.
The futures market this week continued to fall, with the open contracts on the board posting losses ranging from 2.1-2.6%. Average daily volume was up significantly against the previous week’s trading, while daily open interest noted moderate gains. Regardless of industry expectations, the board will trade on actual available information and until some new indicators are presented, the downward trend can realistically be expected to continue.