On Monday this week USDA released its monthly WASDE report. The most significant adjustments this month for long-grain were made to the old crop (20/21) balance sheet. There were no supply changes. However, old crop domestic and residual was lowered by 5 million to 118 million cwt.
Exports were increased 1 million to 65 million cwt. – slightly above 2019’s 64.8 million. As of July 8, long-grain old crop export sales are 3% ahead of the prior year. Shipments are 1% ahead. Rough rice sales are doing all the work. Milled sales are 27% below last year with none reported to Iraq.
With a 5 million reduction in domestic use and a 1 million increase in exports, the net change was a 4 million increase in 20/21 ending stocks to 32.8 million.
Turning to new crop (21/22), beginning stocks were increased 4 million cwt. to 32.8 million. Imports were unchanged from last month at 31 million. Imports are record large and up 11% from last year. New crop long-grain production was unchanged this month at 152.3 million—down 11% from 2020. Survey-based yield projections will be used in August. Of note, total supply is very near unchanged from a year ago at 216.1 million cwt.
For new crop demand, domestic use was lowered 1 million cwt to 120 million; the highest on record. Exports were increased 2.0 million cwt to 63.0 million. This is down marginally from 65 million in 20/21. USDA expects more export competition from South America in 21/22.
Projected 2021/22 long-grain ending stocks were raised by 3 million cwt to 33.1 million. The 2021/22 season-average farm price is unchanged this month at $12.80 per cwt. The 20/21 season average farm price was lowered 10 cents to $12.50 per cwt.
The projected 2020 PLC payment for long-grain was increased slightly this month, with a current projected payment rate of 67 cents per bushel (before sequestration). The projected 2020 PLC payment rate for southern medium grain is 45 cents per bushel.
Rice futures recovered this week with the September contract trading Friday morning about 38 cents/cwt. above last Friday’s close. Flat price offers for August to October delivered rice are in the $5.76 to $5.89 range. September rice futures may hit some chart resistance in the $13.40 to $13.60 range; a congestion area the contract trading in prior to the June Acreage report.
CBOT grains in general have had a good week with November soybeans again trading above $14 per bushel. Extremely hot and dry weather is forecast to settle over the Dakotas next week. North and South Dakota have a combined 12.7 million acres of soybeans this year. Every bushel counts in 2021.