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With the Christmas spirit firmly upon us, the biggest present we could have received finally arrived — a full Mississippi River! The commodity complex across the board is celebrating full barges once again, finally able to deliver complete contracts. This has been a laborious process to deal with, but looks like it should finally be behind us.
With this positive turn, spot market prices remain firm. In Texas, we are reporting prices at $18/cwt, and in Louisiana from $17.30-$18.00/cwt. Mississippi, Arkansas, and Missouri are all at $16.75-$17.25/cwt. The big story this year continues to be milling quality, decidedly in the low 50s for head rice, and the increasing amount of brokens as a result. Mills are having to churn through more paddy to meet milled contracts, but the work is getting done. The industry has its work cut out through the first few months of the new year, being the only supplier of rice in the Western Hemisphere. To that end, we hit a marketing year high on exports this week, reaching 134,400 MT! A very good sign with strong business to Iraq, Haiti, and domestic markets, along with a full Mississippi.
In South America, harvest looks to begin in about 30 days, specifically in Paraguay. It’s interesting to note the prices in South America have finally exceeded those of U.S. long grain, largely due to the current lack of supply. U.S. long grain 5% is quoted around $770 pmt, while Uruguay 5% is $795, Argentina 5% is $775 pmt, and Brazil as high as $850 pmt. If you missed last week’s report, the Brazilian government has confirmed bringing in two vessels of Thai rice to supplement the short crop. This introduces a new dynamic into global trade, as the east-west rice barrier is becoming more porous than ever. We shall see if a return to normal production numbers in Brazil eliminates purchases like this, or if the foothold, now gained, will remain for years to come.
In Asia, prices remain firm in the face of India’s continued export ban, but Thai 5% did soften a bit down to $645 pmt. Viet 5% held at $660 pmt, with firm demand continuing. Reports continue to trickle down that India is letting bits of white rice find its way into the export markets through its G2G mechanism. The numbers reached over 1 MMT weeks ago and are expected to crest 2 MMT before the new year. This isn’t a surprise to anyone following the situation but simply shows this is more of a political ban than anything else.
The weekly USDA Export Sales report shows net sales of 97,800 MT this week, down 9% from last week and 3% from the prior 4-week average. Increases primarily for Venezuela (25,000 MT), Haiti (22,300 MT), Japan (19,000 MT), the Dominican Republic (8,000 MT), and Mexico (6,900 MT). Exports of 134,400 MT — a marketing-year high — were up noticeably from the previous week and the prior 4-week average. The destinations were primarily Mexico (40,100 MT), Colombia (27,400 MT), Venezuela (22,200 MT), Haiti (14,200 MT), and Costa Rica (9,100 MT).
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