The big news this week came on Thursday with the announcement of U.S. rice sales to Iraq. This pushed nearby futures up to $13.85 at one point in Thursday’s trading. September rice futures followed the other CBOT grains lower in early trading Friday. However, the contract remains in an up-trending channel that’s been in place since July 12.
Thursday’s Export Sales report included activity for the week ending July 22. As the 20/21 marketing year winds down, sales were low volume which is not unusual. Long-grain rough rice sales were 6,500 tons (all to Mexico) and long-grain milled sales dipped to a marketing year low of 1,429 tons.
There’s one (1) week and 2 days of export sales left to report in the old crop marketing year. At this point long-grain rough rice sales are up 27% from last year. Sales of 120,150 tons to Brazil have helped. But the largest year-on-year increase in rough rice business has been to Venezuela with sales up 490%.
Sales to Mexico and Nicaragua are both up 21% and 27% respectively from last year levels. Rough rice sales have been the bright spot in trade as milled sales are 26% behind last year. Total long-grain sales are 5% ahead of last year for the week ending July 22.
The next USDA supply/demand and Crop Production reports will be released on August 12. Also, FSA is expected to release its first report of the year on certified crop acres. Following the early June flooding in south Arkansas, questions remain regarding failed acres on a number of crops, including rice.
Ideas that some rice acreage was lost may be part of the fuel behind the futures rally seen since July 12. Certainly the anticipation of sales to Iraq was key as well.