The rice market has been very quiet over the past week even in light of the coronavirus outbreak and the financial market aftermath. Export sales for the week were an impressive 106,000 MT which was a modest drop from the previous week but is exceptional in its own right. Vessel loadings were reported a quarter higher than last week at approximately 108,000 MT.
With the significant reduction in domestic inventories, these numbers are very likely to decline and remain very low until the new crop harvest. This is not a reflection of demand factors but rather a general lack of supply.
Asian benchmark pricing was generally sideways over the week as the coronavirus fears compound the fundamental factors in those areas. With the global stockpiles being slowly depleted, these prices will likely appreciate over the coming weeks although total inventories remain high enough to suppress any major price moves over the near-term estimation. USDA’s world market price was reported slightly higher this week as a result.
Domestically, cash prices have not substantially shifted beyond indicators given the dearth of available rice to buy. The Gulf Coast is all but liquidated from first hands at this time, and while some small lots remain, nothing of consequence is still available. Offshore buyers are working their way up the Mississippi river and the pricing with them as the demand is covered until new crop.
New crop is the focus for most producers at this point with the biggest question mark being planting intentions. It is generally expected that total acreage will increase but the magnitude has yet to be determined. Competition between rice, corn and soybeans is intense and will remain unanswered until the last seeds are in the ground.
In the futures market, the rice futures like most of the other indicators posted losses for the past week. Most of those losses occurred in the previous three days with the Dow Jones Index indicator shedding almost 4,000 points during the same time frame.
A strong argument exists for the beginning of a financial recession, however in comparison the ag futures are relatively unscathed. While the theoretical relationships are currently well out of the normal boundaries, any corrections to the overall market will be felt in agriculture. The best advice to take right now from a producer standpoint is to get out of the way and let the market calm down.