It has been several weeks since the previous report and the fundamentals underlying the rice trade have strengthened significantly, even though price has been slow to respond. The export sales report this week was an acceptable 66,000 MT although last week’s numbers were a very respectable 126,000 of new sales on the books.
On an average basis, this keeps the export numbers in “normal” levels although additional volume will need to move in order to keep pace with the market. Vessel loadings have also maintained momentum against sales as rice continues to ship against old contracts.
Asian pricing has appreciated by several points since the previous report, largely on changes in currency valuations but also on international trade policy fundamentals. No major shifts in this region are expected at this time.
USDA lowered its world market price estimate during the interim between reports but has since held it unchanged from the revision. Again, global fundamentals will likely push this price slightly higher although the global ending stocks will limit the upside potential.
Domestic cash markets remain very quiet. Prices in the South have not significantly changed in the past two weeks and with the Mississippi River still at flood stage in many place, those delivery points in the Upper Delta are not seeing much trading either. The large stocks that are still in inventory upriver will definitely have an impact on new crop pricing although the final values have yet to be determined.
Rice News on AgFax
New crop development along the Gulf Coast continues to progress despite the heavy inundation of rainfall over the past week. In the Upper Delta, plantings continue as the weather permits and although some acres are being added to the equation, the final tally will be far below early expectations.
The futures market had another positive week with all of the open contracts on the board trading into positive territory with the exception of the nearby July’19.
USDA released its monthly supply and demand estimate this week (WASDE) with some notable revisions to the rice balance sheet. On the supply side, total supplies and domestic use were decreased based on reduced planting expectations, primarily in long grain acreage. These shifts were partially offset by higher projected imports.
On the demand side, exports were decreased by 1 million hundredweights. The net impact of the revisions was a 7.2 million hundredweight decrease in ending stocks (entirely attributable to long grain) to 51.6 million hundredweights and a $0.50 increase in the season average farm price to $12.70 for the year.