Rice Market Update: Harvest Gains Strength, South Delta Draining Fields

    Rice being harvested in Prairie County, Arkansas. Photo: Fred Miller, University of Arkansas

    On the ground, the crop continues to mature well, and harvest is ramping up in the lower delta. According to the most recent crop progress report, Louisiana’s rice crop is now more than 92% headed, basically on pace with its historical norm.

    Texas has already surpassed 95% headed, and despite a few weather obstacles, growers are working hard to cut and bring their rice to the bins.

    In the upper delta, the crop is still advancing, and the general expectation is that Arkansas, which is a little behind schedule, will begin harvesting soon. Due to how long it took for the Arkansas rice crop to be planted, the harvest is expected to be a little more drawn out this year.

    So far, the early rice looks healthy, however with the cooler nighttime temperatures and the possibly cooler fall, the later rice yields may taper off some. Missouri eagerly awaits harvest but with the crop only 34% headed, there is still a ways to go before that can occur.

    As for the cash market, it’s basically more of the same: since old crop is virtually gone, so goes the bid. While new crop bids are surfacing in the lower delta, the market is quiet further up the Mississippi River.

    Louisiana new crop prices have slid some from where they first surfaced, but current bids aren’t attracting any interest from sellers. Texas cash rice activity is a bit sideways over the past few weeks.

    In the last export sales report of the 2019/20 marketing year, net sales fell to 2,600 tons in the period from 7/24 – 7/30. This was the slowest week in months, but loadings rallied to 49,100 MT. This of course is indicative of the current demand situation. Exports have slowed drastically as buyers exercise patience and look to new crop.

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    The domestic market has also reached a standstill which is largely the result of restaurant’s closing their doors around the country, some permanently and some hopefully just temporarily as increasing COVID-19 regulations weigh heavy on the food industry nationwide.

    Fortunately, there is some optimism in a few states, where Corona cases that were once seeing daily surges have posted consecutive days of fewer reported cases.

    In the futures market, the nearby contracts lost a little steam from last week, but the further out contracts pressed ahead. The average volume declined by 32% against last week and open interest was 2.9%.

    With the USDA’s World Agriculture Supply & Demand Estimate report being released next week, the futures market may see a little shake up, but then again, most in the industry anticipate minimal changes in this month’s report.

    Full report.

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