Rice Market Update: USDA Reports Expected Decline in Long Grain Acres

    Photo: Clay Gibson, University of Arkansas

    Cash rice demand remains in a lull as growers look to offload their final inventories before turning to the 2021 crop. In Arkansas, growers are asking $13.25 per cwt but are struggling to find a market at that price. Meanwhile, in Louisiana and Texas, the supply-stricken states are seeing what rice is left to maintain the 4-week sideways trading pattern. In the upper Delta, the market is also quiet which is likely the result of low milled rice interest.

    Total demand for U.S. long-grain recovered some from the past few weeks and was only recorded down 2.21% on the year. Although milled sales grapple to find a consumer, paddy demand continues unabated up 40%, year over year.

    Between this year’s larger production and the stiffened demand, it was no surprise to see what the USDA March first stocks report revealed. Long grain paddy stocks, as of March 1st were 72.352 million cwts, up 20% against last year. Milled stocks were only down slightly from 2019/20.

    As for U.S. medium and short-grain, paddy stocks were up only 1.2% despite a larger output, however, milled rice stocks were up sharply against year which is attributed to port and container constraints that have prevailed for much of the marketing year.

    Although the U.S. will move into the new crop year with greater stocks than the previous season, most already anticipate shorter supplies for the 2021/22 marketing year as U.S. rice acres are shed at significant levels.

    Rice News on AgFax

    The Prospective Planting report indicated that U.S. long-grain acres would decline by 11%, however, most in the industry anticipate a greater decline, something closer to 15-20%. Similarly, the USDA’s initial acre forecast for California appears more based on last year’s water situation than the current one. Between water sales and water cuts, Californians are bracing for a substantial drop in planted areas, to the tune of 20-25%.

    World rice prices held relatively steady this week, with only Thai prices edging lower. The dry bulk bull-market run doesn’t appear to be losing steam anytime soon as the demand for coal, grains, and metals is expected to remain robust as the world climbs out of the COVID-induced economic hole.

    As economies ramp up, pent-up demand is expected to spur demand for these vessels which will likely sustain the higher freights that exporters have had to negotiate this past year. Freight rates and a strong dollar could have a strong impact on what happens in the commodity sector in 2021.

    Full report.

    The Latest

    Send press releases to Ernst@Agfax.com.

    View All Events

    Send press releases to Ernst@Agfax.com.

    View All Events