Rice Market: Weather Concerns in SE Asia Impacting Price

©Debra L Ferguson Stock Photography

The rice market has quieted down over the past week from a marketing standpoint although growers across the rice production regions have continued to work to gather the new crop harvest as the weather permits. On the government reports side of the market indicators, the export sales numbers were up noticeably from the prior report at 69,000 MT. Additional export volume would be helpful for the market to establish new crop pricing levels as well as to consume some of the old crop inventory carryover.

Vessel loadings for the week were also up as the trade continues to ship against prior sales. Asian benchmark pricing for the week has been fairly constant with some minor shifts in the key origins.

Weather concerns in Southeast Asia seem to be driving the pricing mechanism at this time, although currency fluctuations remain a contributor as well. The spread between U.S. and Asian pricing is still wide but the gap has narrowed over the past several months making the U.S. more competitive in the global marketplace.

USDA has held its world market price estimate constant this week. There will probably be more adjustments in the weeks to come as new crop inventory begins to swell and impact global numbers.

Domestically, nothing has substantially changed since the previous report from a pricing standpoint. Production-wise, growers continue to harvest new crop with the Texas and Southwest Louisiana first crop harvest around 70-80% complete. Field yields have remained in the 5,000-7,000 pounds per acre range with the conventional varieties yielding lower than the hybrids.

Milling quality is generally reported as good for now with milling outturns yielding 58 pounds of head rice or better while total outturns are in the 72-74 pound range. Smut appears to be fairly widespread this year with both hybrid and conventional varieties being impacted.

The later planted rice appears to be experiencing less smut pressure but sufficient samples have not been graded to make a categorical statement at this time.

In the futures market, the board has continued to trend downwards after last week’s trading action. This week, the open contracts on the board shed between 2.5-4% of their value over last weeks close. The greatest impact was in the nearby contracts. All of the trading occurred with a higher average daily volume and open interest than was seen during the week prior.

Full report.


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