Harvest is near complete in all regions, with early milling yields in the mid-South looking positive. Reports so far show a 1.5-2lb increase on head rice when compared to last year. On the Gulf Coast however, things are a bit different with initial millings looking to be down 1-1.5 lbs on head rice.
Reports indicate that hybrids in Texas have been off from historical norms on the head and total, while conventional varieties are coming in normal so far. US long grain millings since August are down 18% against last year which means the industry has to get a firm handle on average milling yields.
It is a similar story in California, where early reports show head and totals all over the board. But with only a small percentage of the California crop having been graded, there is much to be discovered here.
The 113,000 MT of rough rice that the US sold to Brazil can’t get there fast enough. But with the Port of Lake Charles still in recovery-mode after the hurricanes, things are still moving slower than normal. The US is expected to sell one more shipment to Brazil before the country has its needs met. Ultimately, Brazil was projected to import up to 500,000 MT this year, most of which came from Paraguay and the US.
US rice exporters are now looking to Mexico where sales are expected to ramp up in the coming weeks. In fact, there are several sales currently in the works to Mexico, which should hit books in the near future. There seems to be a high level of confidence among shippers that Mexico will return to a normal pace as we move thru the marketing year.
The cash market in Louisiana is still getting its legs back after hurricane Delta. Rice is trading at $12.35/cwt fob farm where available. In Texas, it’s flat with last week at $13.09/cwt. Mississippi and Missouri, where harvest is still in its final stages, shows bids at $12.15/cwt delivered in Mississippi, and no bids yet in Missouri. Arkansas is all but finished with harvest, and with light domestic demand on account of COVID has prices softening a little bit from $12.55 last week to $12.22 this week.
Export sales posted positive net sales of 60,900 metric tons for last week. Long Grain accounted for 2/3 of the business, with rough rice going to Colombia (15,900 tons), Guatemala (10,000 tons) Mexico (2,000 tons), and Honduras (600 tons). The balance of the long grain was brown or milled and went to Canada, Colombia and Taiwan.
Rice News on AgFax
Medium and Short Grain sales accounted for 20,000 tons moving to Japan (13,000 tons), Jordan (4,000 tons), and Saudi Arabia (3,000 tons). Exports were strong at 84,600 metric tons, with nearly half of that being long grain rough rice to Mexico. There was also significant loadings to Haiti, Canada, and medium grain to South Korea.
In Asia, prices continue to slip, specifically in Thailand where it is now $452 MT for 100%B. These levels are nearly $50 MT below Vietnam, and doesn’t seem to be sustainable. India continues to be low-price leader at $350 MT. The market here is slow, and the price is reflecting the sluggish demand that is most likely COVID related.
Futures remained fairly quiet on the short week. November open interest has been transitioning into January, and the nearby has dropped, which may result in profit taking from technical traders. Average daily volume was 2,081, and Open Interest at 10,135.
Port of Lake Charles, Louisiana Loading Rough Rice for Brazil
Like most of 2020 you can expect the unexpected. The last time a large volume of U.S. rice was exported to Brazil was in 2002/2003 when 342,000 tons (milled basis) was sold to the largest rice producing and consuming country in the Western Hemisphere. The variety known as Cocodrie was a common southern long grain at the time. Due to a set of circumstances brought about by the corona virus and climatic conditions, a shortage of rice in Brazil is a serious matter for government officials as they address food security issues in the country.
This week in the Port of Lake Charles, Louisiana, rice farmers of the South Louisiana Rail Facility (SLRF) are making their own history as they truck rice into the port’s bulk grain facility for a shipment of 30,000 tons. A member of the US Rice Producers Association, the SLRF has become an important entity in the rough rice export market during its brief history as an organization.
“It has not been easy but this group of farmers have not let a number of obstacles get in their way,” says Dwight Roberts, President & CEO of the USRPA, adding “they just go around them and make it happen.” After severe damage by two hurricanes while dodging covid-19 interruptions throughout the growing season, SLRF organized shipments to Mexico, Honduras and Brazil during 2020. A second 30,000 ton vessel for Brazil is expected to load the first week in November.
Brazil recently announced suspending import tariffs on corn, soybeans and by-products to alleviate shortages and high prices just as the government had previously done for rice imports. Earlier this year the SLRF farmers announced plans to construct a rice mill in the Lacassine Industrial Park on property maintained by the rail facility in a partnership with India-based Agreeta Farmer Network.