Rice Market Update: Freeze Expected to Impact Ratoon Crop Quality

Photo: Texas AgriLife Extension

Another slow week has come and gone in the rice market with very few developments and virtually no changes of note. The export sales for the week were reported at a modest 53,000 MT. This volume is notably lower than was seen in the previous report but is also distant from the marketing year lows that have been seen within the past two months. Higher levels would be welcomed but at this time, these numbers are within acceptable bounds for sustained market health.

Vessel tonnage was also off as compared to last week’s loading. There are still a substantial volume of rice in the sold/unshipped column of the ledger which would indicate sustained or higher export tonnage for the near future.

Asian pricing has remained flat over the past week with only minor adjustments to the benchmark origins. There seems to be a bearish tone to that region but that directional indication is minimal at this time.

USDA reduced its world market price estimate again this week, marking the second week in a row that downward adjustments have been made.

In the domestic cash market, there have been no significant changes in the pricing in any of the Southern states since the last report. Unseasonably cool weather has blanketed the rice growing region and while only Texas and Louisiana ratoon crops have been impacted from a rice standpoint, there are still a lot of corn and soybeans still in the fields in the Upper Delta. These unharvested acres will be a difficult component to evaluate as USDA has ceased issuing its Crop Progress Report for the year.

The second crop production along the Gulf Coast was stalled due to the frost over the past week which has halted the ripening of some of the crop. The anticipated freeze in the same areas in the coming week will finish any further crop development if it materializes. While the scope of the damage is not yet known, the weather will most certainly impact second crop quality. Early estimates of quantity project around 3,200 hundredweights per acre for the second crop harvest.

In the futures market, the action was overall bullish with the open contracts on the board generally posting modest gains over last week’s trading. The volume was very light this week as traders position themselves in front of the WASDE report issued on Friday. With all of the uncertainty in the market and the more recent track records of the USDA reports, no one particularly wants to be overly exposed to a market change after the report.

The trade expects a bullish outlook (in rice as well as corn and soybeans) but USDA has had a habit recently of disrupting expectations. Friday’s futures session should be very eventful as the impacts of the reported numbers unfold.

Full report.

The Latest

Send press releases to Ernst@Agfax.com.

View All Events

Send press releases to Ernst@Agfax.com.

View All Events