Rice Market: Harvest Remains The Focal Point

Rice harvest. ©Debra L Ferguson Stock Photography

The rice market remained in the doldrums this past week as very little changed in terms of pricing. Harvest will continue to be the focal point for the industry over the next several weeks.

According to the latest USDA crop progress report, harvest is generally slow for all rice producing states and is on average about 6% behind the 5-year average pace.

Paddy prices will likely see some activity once more yield and quality information come to light. Early indications are still pointing to lower yields, and potential quality issues.

Due to Labor Day, this week’s export sales report is scheduled for release on September 6th. However, the USDA published a GAIN report covering Mexico, providing an update on the production and trade situation in-country.

At present, the USDA expects Mexico to bring in a similar sized crop to the 2018/19 marketing year, however official sources cite production to be slightly lower in 2019/20. Mexico’s imports are forecast to be up about 5,000-10,000 MT in 2019/20.

Guidance on demand for U.S. rice has yet to be given, however, if South America is able to capture more Iraqi business, that would bode well for the U.S. market in Mexico.

World market prices were down slightly this week, despite Asian export prices trading mostly sideways to slightly up. Increases were seen in Vietnam, Myanmar and Pakistan this week. The firming in prices, particularly in Vietnam are being attributed to the milling and shipping against outstanding sales to the Philippines and fresh demand from China.

After last week’s spike in futures pricing, this week held a much more neutral tone, but still a positive one. Last week, futures gained more than 5% across all of contracts against the prior week. This week, the market continued to inch north, but only rose a modest 1.65% in Sep contract.

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