Rice Market Update: Harvest Size, Quality Hotly Speculated

Rice harvest. ©Debra L Ferguson Stock Photography

It has been yet another quiet week in the rice market as the pending harvest becomes more hotly anticipated and the size and quality of the crop opens up even more speculation. In the weekly reports, the export sales numbers for the week were significantly better than that of the past two reports and is in keeping with the cycles demonstrated over the past several months.

This period of cyclical trading will hopefully begin to soften and open up to more consistent business with the advent of new crop and a better understanding of the marketing strategies for the coming year. For now, it is likely that next week will show some markedly lower volume, however this week’s report is much needed for the current market environment.

Vessel loadings were also increased over the last week’s volume. Continued shipments against old sales are key to keeping the mills running smoothly and working through the remaining old crop volume. Asian pricing noted a modest boost across the board this week.

All of the benchmark origins noted incremental gains over the previous report. The cause of this is twofold – currency valuations have accounted for some of the price appreciation while the concerns about the monsoon rainfall in SE Asia have undoubtedly nudged the market up as well.

USDA lowered its world market price estimate for the week, placing values very near to the levels noted two weeks ago before they boosted the number. The confusion revolving around the government reporting is not limited to a specific report at this time, with very significant questions being asked about the WASDE reporting as well as the Crop Progress reports issued each week.

Unfortunately, rice will not be covered in the resurvey of acreage by USDA that they indicate will be incorporated into the August WASDE, but hopefully some parallels can be drawn from the other major field crops that will be adjusted.

In the domestic market, rice is now being harvested in small quantities in Texas and Louisiana, with preliminary field yields being reported at around 5,600-5,800 pounds per acre at this time. As more acres are harvested next week, a better picture of yields along the Gulf Coast should emerge. The August reports should also allow for a better handle on the quality of the crop in this region as well. Other states continue to move forward as best they can, given the weather and other considerations.

In the futures market this week, the nearby September contract moved higher and posted positive gains against last week’s trading. The remaining contracts posted minor losses, ranging from 0.08%-0.12% respectively. All of the market trades resulted in higher average daily volume and open interest over the prior week.

Full report.

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