Rice Update: Market Waiting on June Acreage Report

Young rice at flood. ©Debra L Ferguson

Another week has passed in the rice industry and at this point, very little has changed. Fundamentally, the near-term outlook appears to be somewhat mixed with unknown production decreases in the domestic market balanced against old crop inventories, wallowing export sales, and burgeoning global stockpiles.

The export numbers for the week were a lackluster 28,100 MT reported which is notably lower than the volume of the previous report. The current cycles appear to be one strong week against declining levels in the following two weeks. If this pattern sustains into next week, then there should be an increase in volume on the next report.

This purchasing behavior is typically associated with hand-to-mouth buying by the overseas importers and can lead to additional market volatility as the advent of new crop approaches. Vessel loadings were also decreased over the previous week but given the pace at which old sales are being shipped, this too is not terribly surprising.

Asian pricing has remained almost completely unchanged in most of the benchmark origins. Exchange rates against those underlying currencies have not made any significant fluctuations since the last report which suggests that the fundamentals in the Far East are stable for the time being.

USDA released its world market price estimate this week in which it lowered the projected prices for both classes of rice by $0.07 each. With long term global fundamentals expected to soften as new crop approaches, the indicator may have reached its zenith already.

Rice News on AgFax

Domestically, there has been no significant change in old crop pricing and the new crop values are more in the vein of indications rather than tradeable numbers. The crop in the Gulf Coast regions is generally in good shape and is under permanent flood. The acreage estimates from the Upper Delta are beginning to firm up and confirm the acreage decreases that the trade has long anticipated. The June 30 acreage report should incorporate these numbers into the balance sheet which will allow for a much different picture to be noted in the July WASDE.

In the futures market, this week saw all of the open contracts on the board trade into the red for yet another week with losses ranging from 1.4%-3.7%. The nearby contracts (July ’19 and September ’19) posted the greatest losses. Both open interest and average daily volume were noted as higher against last weeks trading which is indicative of stronger market velocity over the week.

Full report.

The Latest

Send press releases to Ernst@Agfax.com.

View All Events

Send press releases to Ernst@Agfax.com.

View All Events