Rice Market Update: Firming Up Despite Slow Demand

Young rice crop. ©Debra L Ferguson Stock Photography

The long-grain milled market is limping into summer, hoping for fresh demand from any buyer. Carryout is expected to be tighter this year than in the past, and with a short crop having just been planted, there is potential for a firming market despite the current lack of demand.

Arkansas is 89% emerged as of May 30, which is right in line with historical norms. Louisiana is slightly behind with 91% as of May 30, compared to a five-year average of 97%. Missouri is ahead, as is California.

The crop condition is looking like a mixed bag so far. Notably, Arkansas is only 57% in good condition, with 21% registering as fair, and 20% as poor. Louisiana is showing 52% good, and 45% fair, with only 3% as excellent. The heavy rains that delayed or prevented planting altogether are taking their toll on the emerging crop.

On the ground, cash prices in Texas are trading at $13.83/cwt if one can find a price, which is right in line with Louisiana with prices at $13.89/cwt. In Mississippi, the range is $12-$13 delivered, as are both Arkansas and Missouri. With Haiti in the doldrums and no Iraq business, demand is scarce throughout the region moving into summer, and finding any cash business is difficult in the current environment.

Net sales show a decrease of 31% from last week, and 50% from the four-week average, settling at 24,500 MT on the week. Exports of 34,100 MT were down 54% from both last week and the four-week average. The bulk of exports came in the form of fulfillment of a Japanese tender out of CA, with the balance being shipped to El Salvador, Guatemala, Mexico, and Canada.

In Asia, Vietnamese prices have dropped this week as buyers are seeking cheaper origins. India has remained the low-price leader throughout the year and continues to put pressure on other origins—even in the face of their COVID-19 outbreaks.

Rice News on AgFax

Thailand has also been the recipient of some of the buying interest that is falling off from the high-priced Viet rice. Viet prices are still as high as $480-490/MT, but the expectation is that prices will drop to converge with Thai prices in the $460-465/MT range.

India is unchanged at $390/MT. High freight rates and increased fuel costs are biting into rice prices as well, making delivery more expensive. The rally in commodities has extended fully into the dry bulk market, where bullish indicators have been sustained now for five consecutive months.

A recent GAIN report on Mexico has revised the total rice production upwards to 306,000 MT of rough rice, or 210,000 MT of milled rice. This increase, which is nearly 25% in the Spring/Summer crop cycle, is largely attributed to the government’s Guarantee Price program to ensure higher prices to producers. The increase in production has resulted in a bump in stocks, with estimates now up to 220,000 MT.

Full report.

The Latest

Send press releases to Ernst@Agfax.com.

View All Events

Send press releases to Ernst@Agfax.com.

View All Events