The cash market improved slightly this week as prices in the upper delta saw small gains. Meanwhile, cash prices in Texas and Louisiana continue to be stagnant and seem to be awaiting some market development that could shift sentiment.
The more notable activity this week occurred in Chicago where rice prices finally experienced some positive price action. Considering the US Dollar Index (ICE) is down more than 6% from this time last year, it is about time for rice prices to react. In April alone, the US dollar had softened by more than 2%.
The nearby contract jumped almost 4% this week as did the July. The others contracts all trended upward and open interest spiked 11% further indicating market improvement may lie ahead.
Due to lackluster sales to Haiti and the absence of Iraq to date, long grain export demand is down nearly 12% against the prior year. Without the relatively strong paddy shipments and sales this year, the return to grower could have been substantially lower, further exacerbating the rice for bean swap that is becoming so prevalent in 2021.
Rice growers made speedy progress this week as Arkansas’ progress jumped nearly 20% from last week and is now just 3% behind the average pace. The other delta states are all in line with historical trends as far as planting progress goes. As mentioned last week when California planting appeared extremely underreported, the USDA did make the necessary revision and is now pegging the state to be 40% complete.
The second wave of COVID-19 continues to ravage the country, forcing mass lockdowns. Most of the country’s states are all locked down except for a few peripheral states which are in partial lockdown mode. The B.1.617 variant is widely associated with the drastic spike in daily cases, now in excess of 300,000 per day.
It is has officially impacted India’s rice industry as a bulk vessel carrying rice was forced to quarantine following one COVID fatality and several more on board testing positive. Further, India’s vaccine coverage is only 6% compared to the USA which is at 39% which means there is still a ways to go before India is in the clear.
Thai and Viet prices posted small gains this week while Myanmar and Paki prices both slipped some. Overall, the Asian export prices have remained in a relatively sideways pattern for the past month.