Rice Market Update: USDA Report Bullish, Delta Harvest Gaining Strength

Rice being harvested in Prairie County, Arkansas. Photo: Fred Miller, University of Arkansas

All eyes are on Arkansas this week, as there has been little activity in the global markets. It appears that Hurricane Ida spared the Arkansas crop, but the same cannot be said for some grain facilities in Louisiana. Damage assessments are still coming in, but there is more infrastructure damage than crop damage, and initial total damage estimates are being floated in the $80 billion range at this point.

Yield expectations coming out of Arkansas have been optimistic for several weeks now, and that sentiment is strengthening as the first harvesters are in the field. There is talk of this being a record crop for Arkansas; time will tell. Early milling yields have been very inconsistent to date.

The USDA is now showing the 2020/21 carryover at 31.8 million cwt, and an average farm price of $12.60/cwt. In the most recent report, the 2021/22 stocks are showing a 5 million cwt drop down to 23.9 million cwt from 28.8 million cwt last month. There is an average farm price of $12.90.

With Haitian business returning largely through NGO buyers, and the steady Iraq business, the foreseeable future provides for a firm market moving through harvest with the significant reduction in 2021/22 stocks.

In Asia, man-power (or lack thereof) and port congestion rule the day. Viet prices have bumped to just over $400 per metric ton, and exports are tracking in relative similarity to last year. This is more than Thai prices simply because there is the availability to load vessels and ship rice.

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Thai prices have stalled around $385 per metric ton, and the country is having trouble loading vessels that are scheduled for delivery around Christmas time. Overall loadings are down significantly year-over-year, as discussed last week in the review of the freight markets since 2020. Prices in India are in the $380-385 per metric ton as well, with shipments somehow continuing to defy the slow-down seen elsewhere.

The USDA export sales report, delayed due to the Labor Day holiday, shows net sales of 34,000 metric tons. Those sales were primary to Costa Rica (22,000 MT), Honduras (5,500 MT), Saudi Arabia (2,800 MT), Canada (2,200 MT), and Hong Kong (900 MT). Net exports clocked in at 28,900 MT, and were primarily to Japan (12,000 MT), Mexico (7,700 MT), Saudi Arabia (3,900 MT), Canada (2,400 MT), and the Dominican Republic (1,900 MT).

The futures market remains in a sideways to downtrend. With old crop contracts coming to an end, it could put some pressure in the short term, but with a solid supply situation and steady demand, there are no significant reactions at hand.

Full report.

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