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This week’s market update will piggyback on some of the highlights from our Missouri Rice Field Day earlier this week. Harvest continues to look strong where it is ahead of schedule in all states. Arkansas is now just over 10% and going strong. The optimism for a quality crop continues with 79% in the Good to Excellent condition.
With rice finally coming in the barn, it’s nice to view a quick recap of production and its variance from last year. Take a look below:
· Arkansas: 1.31 million acres + 100,000 acres
· Louisiana: 435,000 acres + 38,000 acres
· Mississippi: 158,000 acres + 38,000 acres
· Missouri: 210,000 acres + 193 acres
· Texas: 140,000 acres + 120 acres
· TOTAL LG: 2.251 million + 200,000 total
In California, acres bumped to 470,000 acres, a 20,000 acres increase from initial projections, but a drop over 30,000 acres from last year.
On the ground, paddy is being quoted at $385 CIF NOLA, which is down $15 from a month ago. This is expected to remain, but could firm up on tighter supplies as a result from the loss from the hurricane. Some of the hardest hit producers report losses in the 30% range. One challenge that has emerged in the last two weeks is the sky-rocketing barge rates, some bumping 750% of tariff, up 250-300% from just a week ago.
Taking a look at the global picture, Brazil continues to be a factor in the Western Hemisphere. Their ending stocks are up slightly from last year but still down from historical average. USDA projects slightly higher exports than last year, but still more to develop here. Central America is forecast to import 25-30m tons more than last year, as opportunities for USA with Brazil are slightly down. Mexico, the largest market for U.S. long-grain is back again, after a few years of reduced demand due to Brazil and Asian origin rice. We expect to see greater demand to this destination as they are projected to import 860 MT. Colombia trade has been relatively consistent each year since the COL-RICE trade agreement. In the Middle East demand forecast up 255 MT tons year over year, coming out of Iraq, Saudi Arabia, Jordan, and the UAE. Iraq’s purchase of 40,000 MT, which will be shipped this fall, is welcomed demand after ongoing financing issues.
The weekly USDA Export Sales report shows net sales of 19,800 MT this week, primarily for Guatemala (5,000 MT), Honduras (5,000 MT), Jordan (4,600 MT), Mexico (1,600 MT), and Japan (1,200 MT). Exports of 34,400 MT were primarily to Mexico (25,800 MT), Canada (2,600 MT), South Korea (2,400 MT), Jordan (1,200 MT), and Japan (1,100 MT).
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