Volume 17, Issue 08
February 27, 2020
In This Issue:
  • Rice Market Update
  • Administration Focuses on Trade Deficit with Vietnam
  • Missouri & Arkansas Rice Farmers Gather in Dexter
  • Mississippi Delta Rice Farmers Gathered in Merigold
Rice Market Update
The rice market has been very quiet over the past week even in light of the coronavirus outbreak and the financial market aftermath. Export sales for the week were an impressive 106,000 MT which was a modest drop from the previous week but is exceptional in its own right. Vessel loadings were reported a quarter higher than last week at approximately 108,000 MT. With the significant reduction in domestic inventories, these numbers are very likely to decline and remain very low until the new crop harvest. This is not a reflection of demand factors but rather a general lack of supply. 

Asian benchmark pricing was generally sideways over the week as the coronavirus fears compound the fundamental factors in those areas. With the global stockpiles being slowly depleted, these prices will likely appreciate over the coming weeks although total inventories remain high enough to suppress any major price moves over the near-term estimation. USDA’s world market price was reported slightly higher this week as a result. 

Domestically, cash prices have not substantially shifted beyond indicators given the dearth of available rice to buy. The Gulf Coast is all but liquidated from first hands at this time, and while some small lots remain, nothing of consequence is still available. Offshore buyers are working their way up the Mississippi river and the pricing with them as the demand is covered until new crop. New crop is the focus for most producers at this point with the biggest question mark being planting intentions. It is generally expected that total acreage will increase but the magnitude has yet to be determined. Competition between rice, corn and soybeans is intense and will remain unanswered until the last seeds are in the ground. 

In the futures market, the rice futures like most of the other indicators posted losses for the past week. Most of those losses occurred in the previous three days with the Dow Jones Index indicator shedding almost 4,000 points during the same time frame. A strong argument exists for the beginning of a financial recession, however in comparison the ag futures are relatively unscathed. While the theoretical relationships are currently well out of the normal boundaries, any corrections to the overall market will be felt in agriculture. The best advice to take right now from a producer standpoint is to get out of the way and let the market calm down.

Administration Focuses on Trade Deficit with Vietnam
The Trump Administration has continued to focus on the trade deficit, ramping up pressure on countries like Vietnam to expand imports of goods from the U.S. and resolve market access restrictions related to agricultural products, among others. Vietnam has been one of the principal beneficiaries of the diversion of export manufacturing from China during recent tariff skirmishes, spurring economic growth. Vietnam also benefits from new market access in the 11-nation CPTPP and a new trade agreement with the European Union. 
Missouri & Arkansas Rice Farmers Gather in Dexter
A great crowd of rice farmers from throughout SE Missouri and some from NE Arkansas gathered in Dexter, Missouri this week for the 37th Annual Missouri Rice Council & Missouri Rice Research and Merchandising Council meeting

Mitch Thomas, Chairman of the Missouri Rice Council welcomed the crowd and thanked the numerous sponsors for their support. After a financial report from Daniel Eddy, Dr. Michael Aide, Professor at SE Missouri State University gave a research farm report. Dwight Roberts from the US Rice Producers Association updated the audience on organization’s recent trip to Washington, D.C. and pointed out several key trade policy issues important to farmers. 

Of particular interest were presentations given by Dr. Thomas Wynn on the effects of the current international rice market while Dennis DeLaughter broke down and analyzed the domestic market outlook and what farmers can anticipate for the remainder of 2020. A tight market situation and current global events will affect spring planting decisions. 

A fantastic steak dinner with all the trimmings was served by Tasteful Creations Catering.
Mitch Thomas, a rice farmer from Neelyville and Chairman of the Missouri Rice Council with Dr. Thomas Wynn, a Texas rice farmer and Chairman of the USRPA.
Dwight Roberts, President & CEO of USRPA discusses the rice market and trade policy with one of the younger Missouri farmers at the reception.

Kim Winder with Poinsett Rice & Grain, a sponsor of the meeting, visits with Dr. Thomas Wynn, Chairman of the US Rice Producers Assn. during a reception held prior to the annual meeting.
Mississippi Delta Rice Farmers Gathered in Merigold
With support from Horizon Ag and Progeny Seed, the US Rice Producers Association conducted a Delta Rice Marketing Seminar this week in Merigold, Mississippi at the ever popular Crawdad’s Restaurant. 

Given the circumstances of the current rice market and the outlook for the remainder of 2020, area farmers had the opportunity to join in a discussion of the various issues effecting planting decisions. 

Dwight Roberts prioritized several key issues that need to be on farmers’ radar from a trade policy standpoint while Dr. Thomas Wynn discussed the current international rice market conditions and the effects on delta farmers. 

Dennis DeLaughter assessed the domestic market and the anticipated increase in rice acres. A tight current market with low stocks, uncertain weather, Mercosur’s harvest, developing government policies in Mexico and Central America and now the potential impact of the corona-virus outbreak in China are contributing to an ever changing market that can take an unexpected turn. 

The food was great but then again, rice farmers always eat well! And the fellowship was enjoyed by all.
Dennis DeLaughter presenting, Domestic Rice Market: It's a Long Time Until the New Crop, at the Delta Rice Marketing Seminar in Merigold, Mississippi.
Dr. Thomas Wynn presenting, The Effects of the International Rice Market at the Delta Rice Marketing Seminar.
Congratulations to Dr. Mo Way on his well deserved Distinguished Research Award presented by Dr. Jason Bond of Mississippi State University at the Rice Technical Working Group Conference held at the Perdido Beach Resort Orange Beach, Alabama.
Upcoming Event
March 15, 2020
Deadline to Enroll in ARC or PLC for 2019 & 2020 at the country FSA office

May 19-21, 2020
Rice Market & Technology Convention, Panama

An ongoing, severe economic and political crisis in the country has led to hyperinflation and contributed to falling U.S. agricultural product exports.
China announced a new round of tariff exclusions for U.S. ag commodities impacted by the retaliatory Section 301-tariffs levied by China.
Rice export prices remain unchanged at high levels due to tight domestic supplies.  
Analysts predict that the current severe drought in Thailand will cause losses in agricultural production estimated at approximately 26 billion Thai Baht (U.S. $840 million), mainly due to reduced MY2019/20 off-season rice production.

Providing free rice seed to connect growers to their favored charities

Cornerstone Trade Update
February 21, 2020
Governmental bodies are closely following implementation of the U.S.-China Phase One Agreement. USTR last week announced the formation of a new office to monitor implementation of China's commitments and address disputes that arise.

25722 Kingsland Blvd.
Suite 203
Katy, TX 77494
p. (713) 974-7423
f. (713) 974-7696
e. info@usriceproducers.com