Rice Market: Prices Decline on Dollar Strength

    ©Debra L Ferguson Stock Photography

    After touching $14/cwt. in trading Monday and Tuesday, November rice futures turned lower to finish the week.  Renewed strength in the U.S. Dollar may have played a role in the rice market’s weakness.

    In trading Tuesday, the U.S. Dollar closed above key resistance at the August 20 high of 93.75.  The Dollar rally continued on Wednesday and Thursday, eventually stalling at 94.52—a one-year high.

    November rice futures lost a combined 28 cents/cwt. from Tuesday to Thursday this week.  Chart support for November rice is currently at $13.62.

    Rough rice Nov 2021

    Rough Rice Nov ’21 (ZRX21). Click Image to Enlarge

    Cash basis for rice around eastern Arkansas is showing some harvest pressure this week.  Also of note, barge freight was reported to have increased again this week.  In late August, NYMEX diesel futures were trading at $1.90/gallon.

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    Following Hurricane Ida, diesel has been on steady climb, trading up to $2.36 this week.  This is adding costs for trucking, rail and barges.  Rice basis at mills this week for September/October delivery was 23 cents per bushel under November futures.  Basis at driers was in the range of 29 to 36 cents per bushel under November.

    In Thursday’s Export Sales, long-grain rough rice shipments were a marketing year low of 1,845 tons—all to Mexico.  However, long-grain milled shipments hit a marketing year high of 46,243 tons, with 43,146 of the total going to Iraq.  There were no sales or shipments to Haiti for a second straight week.

    Update:  All Gulf elevators are now said to be at least partially operational.  Cargill’s Reserve elevator is still undergoing repairs, but it can receive rail cars.  Shipments of corn, milo, and soybeans out of the Gulf are showing improvement—although cash basis along the Mississippi river has strengthened very little if any since Hurricane Ida.

    There are a number of basis headwinds from rising fuel costs, tightening storage and fewer barges moving north from the Gulf.




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