If not before, early 2022 will give farmers some hard numbers as to the reality of the overall supplies resulting from apparent lower-than-hoped milling yields throughout the delta region. Most anticipate a tighter supply going forward. 2022 rice planting decisions are up in the air in light of the high cost of fertilizer and many are shifting more attention to soybeans. The bridge to the new harvest seems to be getting longer and the outlook for farm prices remains positive. The question is if farmers can take advantage of the expected conditions.
Since October 1st, the long grain spot market has been largely sideways throughout most of the delta. Cash prices have appreciated only 2% since harvest whereas futures are up nearly 3.5%. Although the market lacks a little excitement on the export front, domestic millings are up an impressive 13.5% year to date. Sluggish paddy exports are being offset by an increase in milled rice exports.
Argentina recently encroached on a key US market, as the country sold 10,000 MT of paddy to Mexico. Brazil is also proving to be a formidable competitor in the paddy arena with stronger shipments to Costa Rica and Venezuela. The improved milling activity in the US is attributed to greater milled rice shipments to markets in Latin America where Brazil and Argentina appear to be less engaged. Higher domestic use is also thought to be a supporting factor. Fortunately, the export market is propped by the milled market segment, which should begin to have a positive impact on the market if it remains strong.