The rice industry has continued to hold steady since the previous report, however the market undercurrents seem to be gaining momentum. In the international side of the indicators for the week, export sales reported a less than stellar 11,000 MT of total new sales for the week.
From a cyclical standpoint, this is consistent with the trend noted in previous reports and it is very likely that a larger number will be noted in the next installment. Vessel loadings for the week were still off as compared to the prior report but remained at a healthy 84,000 MT.
Conversely to the sales report, this number may well decrease in the coming report as the shipping schedule catches up with old sales on the books. Renewed export demand is badly needed to help handle the excess 2018 crop that has been contained in the Upper Delta by the flooding along the Mississippi River.
As new crop nears, this volume will need to be moved out of the marketplace in order to prevent a significant oversupply at harvest time.
The benchmark Asian pricing was mixed over the week as political turmoil has driven the exchange rate market (specifically the dollar) to higher levels. The exchange rates aside, the supply and demand fundamentals in that hemisphere have not significantly changed to indicate any major price fluctuations in the near futures.
USDA boosted its world market price estimate in a major readjustment. This marks only the second time that the price has actually increased since the first of the year.
Cash markets have been quiet since the last report. Price indications have firmed up for old crop and new crop pricing is almost speculative at this time.
Rice News on AgFax
Plantings in the Upper Delta states are reported as ranging from 40%-60% of intentions due to weather. With the prevented planting deadlines looming in a matter of days, growers will have to make far reaching decisions quickly. To complicate matters, the U.S. has recently announced an additional $1.6 billion Farmer Aid package that will include rice.
The actual numbers allocated between crops has not been released but USDA is encouraging producers to focus their production intentions on market factors rather than the possibility of a federal payment that may or may not be realized.
Long term implications of this type of program are uncertain and will be dictated by how any payments might be derived and implemented.
The futures market has had a very good week as it responds to the myriad of factors that have suddenly converged on the market. The open contracts on the board posted positive gains between 5%-5.6% on notable higher average daily volume.
The open interest at the market close for the week was slightly lower than last week’s numbers suggesting that market liquidity is improving at this time.