The USDA released their November WASDE report earlier this week, which for the most part was uneventful. There were no new changes to the 2020/21 marketing year, but there was an array of changes to the 2021/22 long grain balance sheet.
The USDA lowered import projections by 1 million cwts to 27 million cwts, which means fewer imports than in 2021. Production was raised by 2.4 million cwts to 146.7 million cwts. Even with the increase, the output is still down more than 14% year over year. Domestic use was bumped up 1 million cwts, but that was offset by exports being revised downward 1 million cwts.
Ultimately, as expected, the USDA lifted its ending stocks forecast by 1.5 million cwts but left the season-average farm price unchanged against last month. The USDA has not made any comments with regards to grading and milling yields out of the delta while field yields have been good. Supplies will get tighter if the milling yields are lower than expected.
It was even less exciting for U.S. medium and short-grain where production was increased 800,000 on stronger than expected yields. Domestic use was raised by 500,000 cwts and exports were unchanged. Overall, the USDA’s ending stocks forecast swelled to 8 million cwts, which is, historically, extremely low.
U.S. paddy exports continue to trail last year’s numbers, with markets such as Mexico, Costa Rica, Venezuela, and Nicaragua all posting notable year-over-year declines. Unlike last year where paddy shipments bolstered U.S. long-grain exports, this year, strong milled rice sales to Haiti and even Mexico have provided the much-needed support.
In Asia, Thai rice prices have recently hit 4-year lows as the country’s abundant supplies is compounded by both higher ending stocks and a larger production in 2021/22. Even with analysts boosting export projections this year, the projected ending stocks are poised to reach 5-year highs. Indicative prices for Thai 100% B recently fell to as low as $374 FOB and is still trading at a premium to India 5% brokens which were quoted at $359 FOB earlier this week.
Despite sinking prices in these two giant rice exporting countries, Vietnam was able to hold prices steady from last week. With China’s rice demand slowing, not to mention Kenya’s, prices are unlikely to find positive support in the immediate future.