Throughout the Delta growers have been consumed with planting and battling poor weather conditions. As a result, there was very little selling interest this past week.
It also didn’t help that some of the early buying interest seems to have slowed, especially in Louisiana where cash prices have softened more than $1.50 per cwt from previous new crop sales. At the current levels, the spot market is proving uneventful.
Given the weather conditions and the difficulty in getting the crop planted, the volume of acres is becoming increasingly dynamic. The prevented planting subject is being widely discussed, and while we are told that the rice will get planted, there are plenty of growers seriously weighing their options.
Of course, moving into the new marketing year on fumes and with the ongoing uncertainty surrounding the coronavirus, rice farmers want to plant. Rice has been one of the most resilient and even most rewarded commodities throughout the pandemic.
Arkansas is well ahead of last year in regards to planting, but lags the 5-year average by 12%. At 76% planted, the story in Arkansas is far from over, especially for medium grain where acres are projected to be down from early intentions.
Asia rice prices were mixed this week with Thailand prices trading up $5 per ton at $495, Vietnam trading sideways and Myanmar prices resurfacing $15 per ton lower than the most recent quote. Logistical issues in India continue to hamstring the country’s rice industry, in many cases causing shipping delays or cancellations.
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The USDA further corroborated this information in a report which showed a sharp decline in year over year shipments from key India ports.
In Latin America, Uruguay and Argentina are generating strong exports throughout the region and even into Mexico. Brazil is largely tied up with confronting a worsening coronavirus situation, as is Mexico. Brazil hit a record high new coronavirus cases on Wednesday, signaling that the country is far from flattening the curve.
As this situation develops, Brazil will need to ramp up food imports to provide food security. This is made difficult due to the value of Real, which is one of the world’s worst performing currencies in 2020.
Futures action this week was relatively light, as the July contract only gained $0.08 per cwt from last week to end Thursday’s session at $16.04 per cwt. Volume fell 57% against last week to 279 and while open interest was only down 1.8%.