Hurricane Delta completes the trifecta of storms that the 2020 rice harvest has endured. Harvest of the second crop in Louisiana has been impacted in the form of lodging, flooding, and rice simply being knocked off the panicles. Mills and bins were left without power again, only a few short weeks after hurricane Laura ravaged the area.
In Arkansas, this is yet another weather event that has extended harvest, but the largest rice producing state looks to have been mostly spared from hurricane Delta, and will finish without too much crop destruction. Arkansas is 83% complete as of the Oct. 11 USDA crop progress report, which is 9% behind the 5-year average.
Mississippi and Missouri are both lagging their 5-year average by 6% and 10% respectively, but should be wrapping up in the next week or two as Missouri waits for the rice to ripen.
Brazil’s need for rice came at a perfect time for the US, as the industry can finally service the demand with this large new crop that is approximately 20% larger than last year. We expect the first vessel to arrive for loading within the next seven days. Estimates peg Brazil’s imports in excess of 250 thousand metric tons when the milled imports from Pakistan and India are included.
The timely Brazilian demand for US rice aides significantly in disappearance for this year’s larger crop. However, this has created a problem for the mills because the Brazil business is paddy exports; and this coupled with the established paddy exports to Mexico leaves mills with excess capacity.
To remedy this, the industry is looking to Iraq to finally come through the tender that has been rumored for several weeks now.
In Asia, severe flooding in Cambodia and Vietnam is causing destruction in at least 325,000 rice acres. Thai export prices continue to trend downwards to $460 MT, while Vietnamese prices firm a bit up to $475 MT. There is an anticipated increase of Chinese rice as their increased plantings more than offset the flood damage this year.
Rice News on AgFax
The cash market has remained relatively calm as harvest winds down. Very little to speak of in Louisiana and Missouri, but reports of sales in Texas at $6 premium over loan for rice with good milling yields have been reported. In Arkansas, early reports show that milling yields are strong, and cash bids are at or slightly below the board.
Export Sales reversed course this week, showing only 10,000 metric tons of sales, compared to the 258,100 metric tons from last week, and 127,100 metric tons from the week before. Exports however, reached their highest number in the last six weeks at 35,200 metric tons. The majority of these shipments were long grain rice to Colombia in the amount of 23,800 metric tons.
The futures market traded sideways to slightly down, with the nearby contract down 1.12%. The Sep 21 and Nov 21 contracts were both up 0.53% to $12.30. Open interest was slightly up by 2.66%.