Rice Market Update: Gulf Coast Harvest Under Way

Rice harvest. ©Debra L Ferguson Stock Photography

The rice industry is still rather quiet as data from the new crop harvest has yet to be reported in order to get the trading year off to a start. The export data for the week noted moderate decreases in tonnage sold as compared to the previous report. Next week’s numbers can realistically be expected to be lower if the cyclical buying patterns hold true.

As has been noted in previous reports, this hand-to-mouth purchasing from overseas buyers will hopefully dissipate with the advent of new crop harvest and a more stable marketing scenario for the year. Vessel loadings were also reported lower than last week but remain at acceptable levels to get business done. Large amounts of old crop carryover inventory will still need to be moved if pricing is to achieve any significant gains over the next few months.

Asian pricing has been relatively stable across the benchmark origins, although the Thai prices have seen nominal across the board increases. The market in that part of the world should begin to respond to more fundamental forces over the next few months which will help to establish global pricing and competition.

USDA raised its world market price estimate this week as well. The up and down fluctuations that have been seen in this estimate over the previous weeks would suggest that next week may see yet another decrease.

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Domestically, the market has been flat with no real movement in several weeks. New crop is not actively trading in any significant quantity at this time, although the harvest along the Gulf Coast is well underway. Weather conditions in the Upper Delta have been favorable to rice development over the past week which will help those growers get closer to the finish line.

The futures market action has been overall negative since the last report. Rice has been tracking lower on a weekly basis than was seen over the last few months, but much of the forces are a result of the other grains (chiefly corn and soybeans) shedding a large percentage of their value over the past 30 days. On the rice board, all of the open contracts posted losses over last week’s values. The losses ranged from 0.65 – 1.46 on significantly higher average daily volume and open interest.

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