The rice market doldrums continue as new crop harvest looms on the horizon and the market looks for news to process ahead of the harvest interval. The governmental reports showed a very dismal export sales number which is very far away from the volumes noted in the past few weeks.
From a cyclical standpoint this week’s report was expected to be higher, however this is not inconsistent with the longer term trend and as such the next report should indicate much more positive values. Additionally, new crop harvest will begin along the Gulf Coast which will provide some footing for the initial new crop trades.
Vessel loadings were more positive as compared to the earlier numbers although these tonnage numbers are still on the low side given the outstanding sales. Overseas, the benchmark Asian origins have remained virtually unchanged in most sectors although there were a few minor adjustments depending on origin and type of rice.
Nothing major was noted over the past week outside of regional adjustments and currency fluctuations. The weather in the Eastern sphere is worth watching at this time as monsoon season is reportedly delayed; if this persists, it will have a bullish impact on pricing.
The USDA adjusted its world market price estimate higher for both classes of rice this week which is the second consecutive report with upward movement. In the domestic cash markets, new crop harvest is imminent and the minimal impacts of Barry over the past week were a boon to the industry. Most of the rice producing areas were not significantly impacted by the storm and those that were have noted only minor damage in most areas.
New crop harvest in Texas and Southern Louisiana should commence in the next two weeks with some lots being harvested as early as next week. Based on that time frame, some early indications on quality and quantity from those areas should be available by the end of the month.
Rice News on AgFax
The impact of the additional flooding on the Mississippi River has thus far been to advance the continued flood stage conditions further into the future. This has already strained the ability to move old crop at any volume from the Upper Delta and may provide some additional difficulties with the advent of new crop harvest pressure.
Industry sources report a sale to Iraq which will help to buoy the market in the interim and will hopefully draw down some of the stockpiles through the early part of the marketing year. The futures market this week struggled to maintain upward momentum and ultimately was unable to do so at the end of the week.
While the market moves were not as significant as in the other grains, all of the open rice contracts on the board posted losses ranging from 0.08%-0.34% respectively. This change comes in conjunction with the exit of the July ’19 contract from the board and its replacement with the September ’19 contract as the new nearby contract.
These trades all occurred on lower daily volume and higher open interest than the prior trading week.