Rice Market Update: Trade Moves into Holiday Doldrums

©Debra L Ferguson Stock Photography

The rice market has remained very quiet over the past week and will probably remain so until after the first of the year as the trade moves into the holiday season.

The export sales for the week were reported at a modest 48,800 MT. This volume is marginally higher 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 acceptable given the season.

Vessel tonnage was also up as compared to last week’s loadings. There are still a substantial volume of rice in the sold/unshipped category, and it is likely that overseas origins are trying to get as much business done before the holidays as possible.

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Asian pricing has remained flat over the past week with only minor adjustments to the benchmark origins. There seems to be an emergent bullish tone to that region but that directional indication is minimal at this time. USDA held its world market price estimate constant again this week, marking the second week in a row that no 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. The upper delta is reporting quality concerns specifically with respect to milling yields although some smut has been reported as well. This will help to erode the carryover numbers in the coming months as it requires more volume of rough rice to make the same out-turns of whole grains.

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 responded to a unchanged WASDE report.

The December (and final 2019) WASDE report was issued this week with very few modifications. This report saw no supply side revisions with minor adjustments to the demand side that flowed directly through to the end of the balance sheet. On the demand side, long grain exports were increased by 3.0 million hundredweights which was partially offset by a 0.5 million hundredweight reduction in the medium/short grain export tally. The ending stocks estimate was subsequently reduced by 2.5 million hundredweights or 24% down from last years figure.

With the market trading extremely sideways in almost all of the benchmark sectors, it is unlikely that any significant revisions to the current market scenario will occur in the coming weeks.

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