The rice industry has become a bit more exciting this week as events are beginning to transpire which are providing new information to process and trade. Also, with the advent of a new marketing year, the industry is getting settled in for the 2019 marketing season as of August 1.
The export sales report for the week noted significant sales as compared to the previous week’s trading. This has been anticipated for several weeks. The new crop harvest will begin to become available over the next 10-14 days which should change the buying dynamic of overseas purchasers.
Vessel volume for the week was much lower than has been previously seen. With new sales on the books and more favorable export conditions (from a loading standpoint at least), the next report should note gains in this side of the export environment.
The weekly world market price estimate was much higher than has been seen in the past few months but with the new marketing year starting, this estimate also takes into account the higher loan rate as compared to 2018. Most of the apparent gains are more related to loan rate appreciation than to fundamental factors in the rice trade. Asian pricing has begun to climb in most of the benchmark origins.
Thai rice particularly has noted appreciable gains over the past several weeks of trading. Much of these gains appear to be supply and weather related at this time.
Domestically, cash prices for new crop have remained stagnant with very few trades being made as growers anxiously await to see what the crop size and quality will be before making any commitments.
Along the Gulf Coast, preliminary yields are being reported as ranging between 5,600-7,200 pounds per acre for conventional varieties. Meanwhile hybrid varieties are estimated as ranging between 7,000 – 8,900 pounds per acre depending on the location. Both estimates are green basis. Some smut issues are being reported in both conventional and hybrid varieties in early samples which does not help the quality concerns for the new crop harvest.
The Mid-Delta reports that a few fields will be ready to drain and some data from that region should begin to materialize in the next two weeks.
The futures market has had yet another negative week, with losses compounding further into negative territory over last week’s trading. This week saw the open contracts on the board trade between 3.6%-5.2% down on much large average daily volume and decreased open interest.
The next report will incorporate the August WASDE which is widely expected to move the market as updated production numbers from corn and soybeans are brought to light. These factors, while not impacting rice directly, will definitely drag the market in their respective direction.