|
The crop is marching along nicely with all states now showing rice headed. Louisiana leads the way with 33% headed, followed by Texas at 25%, then Mississippi at 17%, California (oddly) at 10%, Arkansas at 3%, and Missouri at 2%. Overall, that puts the average at 11%, which is surprisingly 3% higher than the five-year average. The crop condition does provide some food for thought as the weeks tick by, as just over a quarter of the entire crop is showing in only Fair condition. Louisiana is registering 57% in the Good or Excellent categories, with 41% as only Fair. Mississippi shows 60% Good or Excellent, with 35% as Fair. Arkansas is looking a bit more normal, with 67% Good or Excellent, and 27% as Fair, but 6% in the Poor and Very Poor categories. California is showing 95% Good or Excellent, with 5% Fair. This would indicate that the crop in Louisiana may have some catching up to do by way of quality and that overall, we would like to see more than 75% of the crop in Good to Excellent condition in the coming weeks. The rebound in acres has been a solid change for the industry this year; it would do well to follow up with a quality crop with high milling yields as well. The intense heat and high night temperatures in Texas and parts of Louisiana have farmers worried about its effect on milling yields and overall quality. Today’s USDA acreage report to be released at 12:00 pm ET will be of interest to farmers, the trade in general, and the foreign marketplace.
In trade for the Western Hemisphere, the Panama tender is the big news, and perhaps a bellwether for what the coming crop year may look like for the U.S. exporters. As we have mentioned, Uruguay is the only likely supplier on account of no rice in the U.S., and a shortage from other South American origins as well. We know that price convergence is a must, and that means prices will likely elevate in South America due to weather-related shortages, and prices in North America will drop due to increased crop size. Ideally, the upward pressure on the price we are seeing in the Eastern Hemisphere as well will prevent any more Pakistani or Vietnamese rice from finding its way to the West. Production shortages in Ecuador and Peru contribute to market complications.
In Asia, prices continue to firm with another increase this week. Thailand is now as high as $525 pmt, which is a 20% increase year over year. Vietnam is up to $510 pmt, compared to prices at $415 pmt a year ago, registering a 19% increase from this time last year. This makes sense when you see that Indian prices are now as high as $465 pmt after their partial export ban and tariffs, as before those were imposed, prices were only $340 pmt a year ago for the world’s largest exporter. The price bump we are seeing in Thailand and Vietnam is partly on account of currency fluctuations, partly from strong demand, and partly on concern about early monsoon rains in India that could have an impact on their exports in the coming days.
The weekly USDA export sales report offered some good news with net sales of 19,500 MT, up 47% from the previous week and 54% from the prior 4-week average. Increases were primarily for Haiti, Canada, and Mexico. Exports of 33,500 MT were down 25% from the previous week and 30% from the prior 4-week average.
The futures market took a hit this week, as the larger crop is finally taking its toll on pricing expectations. The Sep 23 contract is down 4.95% to $14.960, followed by the Nov 23 contract down 3.97% to $15.125. Average daily volume dropped 23% to 905, while open interest stayed relatively flat with only a 2% drop to 8,838.
| 
