Rice Market Update: Time to Plant in Texas, South Louisiana

    With planting intentions drawing near, it is clear that acres will likely not exceed the numbers from last year, nor will they drop as much as some expected on account of the fertilizer and fuel prices. However, that story is still being written as Russia is invading Ukraine at the time of writing.

    Atrocities aside, the world’s dependence on Russian exports of fertilizers and energy is significant, and price hikes are coming in multiples at the moment. Overall impact of the current geopolitical conflagration is yet to be determined, but the one thing for sure is it will continue driving production costs, inflation, and food prices up.

    On the ground, paddy pricing remains strong despite what feels like weak demand—though actually isn’t. With the drought in S. America and the shorter crop in N. America, mills seem to be preparing for what could be a tighter year than the Western Hemisphere has seen in quite some time.

    Paddy exports remain strong, and despite not having fresh business from Iraq in the milled markets, processers are busy keeping up with demand that hasn’t slowed to a dangerous pace. It would appear that even though the market seems to be lulled to sleep at the moment, everyone is preparing for a bit more motion in the coming months.

    Prices in Texas have remained unchanged, still holding strong at $15-$15.50/cwt. Louisiana is also holding steady in the $14.50/cwt range. Mississippi, when you can find supply, is in the same price range, perhaps just a bit higher than Louisiana at $14.75. Arkansas and Missouri follow suit in a similar price range, holding steady.

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    This market is trading sideways, but there’s an undertone of expectation riding on the heels of a decreased supply in North America and severe drought in South America.

    The weekly USDA Export Sales report shows net sales of 84,200 MT , which is up noticeably from the previous week, but down 25% from the prior 4-week average.

    Increases primarily for Mexico (53,700 MT), Haiti (15,200 MT, including decreases of 100 MT), El Salvador (6,000 MT, including 500 MT switched from Honduras), Costa Rica (5,000 MT), and Canada (2,400 MT), were offset by reductions for Honduras (1,500 MT). Exports of 116,800 MT–a marketing-year high–were up 87% from the previous week and 77% from the prior 4- week average.

    The destinations were primarily to Colombia (46,000 MT), Mexico (33,200 MT), Japan (13,400 MT), Haiti (7,100 MT), and El Salvador (5,500 MT).

    The futures market shows an average daily volume of 1,808, an increase of nearly 70% from last week, while open interest has dwindled slightly, falling to 8,951, or 4% below last week. Mar ’22 prices bumped 1.39% to $15.12, while Jan ’23 prices bumped 2.04% up to $15.195.

    Full report.

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