Rice Market Update: Thailand Sales to Iraq Not Good News for U.S. Export Efforts

©Debra L Ferguson Stock Photography

Harvest is in full swing in Arkansas, and the optimistic yield projections are ringing true. All through Arkansas, Louisiana, Mississippi, and Missouri, yields are coming in strong; however, the same can’t be said for early milling yields. While field yields are clearly above regional averages, milling yields are registering below regional averages at this point. Arkansas and Mississippi are both over 50% complete, while Missouri and north Louisiana are lagging at closer to 25% complete.

The rice simply isn’t drying out in the fields, but that is looking to change this week with a changing weather front. It is important to note that the strong field yields are not having a material impact on pricing expectations at this point; the 15% reduction in acreage has served as a corresponding counterweight.

In Asia, Vietnam is openly shying away from signing new contracts because exports are so difficult to execute. Whether a lack of manpower, a lack of containers, or port congestion and delays, one of the world’s top exporters is pumping to brakes in order to prevent defaults. Exports from Vietnam to Malaysia have dropped nearly 60% in volume this year. There is news from Thailand this week that will likely have an impact on the U.S. rice industry.

After a seven-year ban, Iraq has booked its first business with Thailand for rice exports. It’s a well-known fact that origins in South America, like Uruguay, and the United States have been hoping for continued demand from Iraq to provide additional market support. However, this newest agreement with Thailand has the potential to weigh down the market in the Western Hemisphere.

Rice News on AgFax


A USDA GAIN report on Mexico shows a decrease in production estimates for the 2020/21 marketing year. The expectations have revised downward to 290,000 metric tons of rough production (199,000 MT of milled rice) on lower than anticipated yields due to adverse weather conditions. This has a corresponding upward revision in trade from 800,000 metric tons up to 825,000 metric tons, which bodes well for the U.S. industry.

The weekly USDA Export Sales report shows net sales of 28,800 metric tons, which is down 9% from last week and 41% from the four-week average. South Korea had the lion’s share at 20,000 metric tons, with the balance coming from Canada, Saudi Arabia, Costa Rica, and Mexico. Exports of 19,800 metric tons are down 76% from last week, and 66% from the four-week average. Destinations were to Japan, Mexico, Canada, Saudi Arabia, and Jordan. These decreases are largely a timing issue, as the Iraq business has increased overall exports over 100% year over year at this time.

The futures market has turned out to be more resilient than anticipated, largely on account of the most recent Supply/Demand report. Weekly session lows registered at 13.515, and highs reached 13.90. Average daily volume was at 498, a 10.5% drop from last week, and Open Interest was 8,405, a 4.2% increase from last week.

Full report.




The Latest


Send press releases to Ernst@Agfax.com.

View All Events


Send press releases to Ernst@Agfax.com.

View All Events