Rice: More Rice Acres For 2020, USDA Projects

©Debra L Ferguson Stock Photography

Cash prices were relatively unchanged across the board this week as cash rice supplies continue to dwindle and growers turn their attention to groundwork and planting.

For all intents and purposes, old crop in Texas and Louisiana is gone, so buyers looking to source paddy have to move up the river to Arkansas, where supplies are also tight.

Planting surveys indicate that the Texas crop is about 80% planted, and Louisiana is well underway. Starting next week, the USDA will begin releasing their weekly crop progress reports.

Milled prices, both domestically and internationally continue to react to the Coronavirus stockpiling hysteria. Milled prices in Thailand have shot up nearly $140 per ton since February on increased demand. Of course, Vietnam halting its rice exports, as well as India pulling back are strong factors that continue to disrupt the global rice trade.

From a stocks perspective, there appears to be sufficient supplies to satisfy global demand, assuming the market can proceed normally, ie., no export bans and reduced panic buying. Since both of these are still ongoing, it’s difficult to project the full impact that the coronavirus will have on world prices over the next 12-months.

This week NASS released the annual Prospective Planting report. The reported indicated that growers expected to plant 18% more acres than last year at this time. Arkansas was up 25% year over year at 1.19 million acres, Louisiana at 390,000 acres, Mississippi at 150,000 acres, Missouri at 190,000 acres and Texas at 170,000 acres.

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California acres are forecast at 500,000 acres, but most in the industry already anticipate planted area to be north of 520,000 acres. Note that last year’s Prospective Planting report projected total U.S. rice acres to be 1.778 million acres compared to the actual area harvested which was only 1.73 million acres.

The USDA also released the stocks report which showed rice in all positions as of March 1st. Long grain rough rice stocks were down more than 22% against last March while milled rice stocks were up 59% year over year. Medium grain stocks were also down year over year. The fact that this stocks report basically reflects rice in all positions before the outbreak really made it to the U.S. suggests that futures stocks reports, ones that take into account all of the panic buying will ultimately show a much tighter picture.

In the futures market, the nearby contract climbed over 3% and while slightly more modest the other open contracts all posted gains against las week as well. The futures continue to seek convergence with fundamentals which implies further gains may be likely in the short run.

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