The rice market seemed to find some support this week on declining crop conditions and ideas planted acres may be less than projected two months ago. In last Monday’s Crop Progress, NASS lowered the percentage of the crop rated good-to-excellent in Louisiana, Texas, California, and Mississippi. The U.S. crop rating overall slipped 3 points from the previous week to 71% good-to-excellent.
Of particular interest, the Louisiana crop was downgraded to 45% good-to-excellent and Texas 53% good-to-excellent. It is early in the growing season and nearly impossible to predict crop performance at this stage. However, these low ratings for the southernmost rice production areas illustrate how excessive rain, cloudy conditions, and cooler temperatures have impacted the crop thus far.
Louisiana and Texas have struggled to get the last 5% or so of their intended rice acres planted. NASS reported some areas in those states received 10.0 to 20.0 inches of rain last week. Weekly (May 16-22) rainfall totaled 17.32 inches in Lake Charles, LA. and 14.60 inches in Beaumont-Port Arthur, TX. Not surprising, there were many reports of blown out levees and rebuilding underway.
This is likely the last week traders will give much attention to the planting progress numbers. Arkansas’ rice planting reached 93% complete as of May 23; ahead of last year’s pace (84%) and slightly ahead of the 5-year average (90%) for the week. U.S. planting overall was 95% complete; ahead of the 5-year average of 90% and last year’s 88 percent.
New crop rice futures have been under pressure since the May 12 USDA supply/demand report. Recall it did include the first supply/demand projections for the 2021 crop and long-grain ending stocks came in at 32.1 million cwt.—heavy. With production based on 2.078 million planted acres of long-grain, fuel for higher prices has been lacking. As seems customary, we find ourselves waiting for better information; in this case, the June 30 Acreage report.
With planting delays and new crop soybean prices trading over $14 at times in May, private expectations are for rice acres to come in below March intentions. Thus, the burning question becomes “how much lower?”. We can only speculate for now as we will not have a tradable acreage number until June 30, when the NASS Acreage report is released. With the trade biased toward lower acreage and production, it will be difficult for the market to trade much lower at this point.
Cash Market: Bids / Basis
New crop rice basis remained firm this week at 16 to 23 cents per bushel under September futures. Fall delivery (Aug. – Oct.) bids at driers / local elevators were in the $5.83 to $5.90 per bushel range as of Thursday’s close. Basis at mills was 9 cents under September futures with bids near $5.97 per bushel.
Gulf urea prices turned higher over the last two weeks. This may be linked to ideas corn acreage is climbing. With planting now past 90% complete, private analysts expect final acres to be 2 to 5 million above USDA’s March Prospective Plantings survey. Most estimates are in the range of 93 to 94 million vs USDA’s 91.1 million acres. In March, Gulf barge prices for urea traded as high as $400/ton, levels last seen in April 2014. For the week ending May 21, Gulf urea prices averaged $373/ton. Compared to a year ago, barge prices for urea are $167/ton or 81% higher.