Domestically, all eyes are on planting where growers in Louisiana, Texas, and throughout the delta are making quick work as best they can. Adverse weather conditions further north in Arkansas, Mississippi and Missouri have kept planting at bay. According to the most recent USDA crop progress report, these two states have only planted one third of what is normally done by this time of the year, so improved weather will be critical in allowing for catch up. As a result, rice emerging in Louisiana and Texas is ahead of schedule, but the other states continue to lag.

 

Reports of a new crop bid for $13.80 per cwt in Louisiana is just one indication of how scarce rice supplies are as we head into the new marketing year. While old crop in Texas is nonexistent, new crop is being quoted at $12, but is attracting only minimal attention. In the other rice growing states, finding both old and new crop bids has proven difficult. Recent sales of new crop in Texas and South Louisiana to both domestic and foreign buyers indicate a strong start is in order for the new harvest beginning in July.

 

Since early February, Asian export prices have been on the run, which seemingly came to a halt last week when export prices showed their first sign of fatigue. This basically marks the second week of steady pricing, which is in part due to Vietnam announcing a reopening of their rice exports. Still, even this news is muted as there were tight restrictions on what can be exported. It was agreed that the government would allow 400,000 MT to be shipped in April, most of which was already in transit and at the port. The government will reconvene to discuss export quotas for May on April 25th.  

 

As storage for oil in the US and around the world runs out, prices continue to plummet with the exception of a slight bounce later in the week. Most analysts project that storage will be completely depleted in a matter of weeks which will force a reduction in worldwide production. Unfortunately, the larger piece of the puzzle relates to demand, and with all of the ongoing uncertainty surrounding the coronavirus, it’s difficult to project when demand will return to levels that drive profitability in this sector. Naturally, some analysts expect this catastrophe to have a long lasting impact on the oil industry and expect to see significant consolidation in the immediate future.  

 

Export sales were up substantially from last week, as net sales were recorded at 67,100 MT; on the other hand, shipments fell below their 3-week average at 67,000 MT.

 

Activity in the futures market spiked as both volume and open interest increased considerably against the past few weeks. The May and July contracts closed up $1.50-2 from the prior week, reaffirming the strength in old crop prices. Prices in new crop contracts were relatively flat this week.

Today the House of Representatives is expected to consider and pass another spending bill H.R. 266 – Paycheck Protection Program and Health Care Enhancement Act. Of course, this does not indicate that everyone is in agreement about the pandemic response. H.R. 266 was a rapid legislative response to the incredible shortage of funding originally provided to the Paycheck Protection Program. After delays in consideration, other issues were included which eased Senate passage of the bill. H.R. 266 provides $310 billion in additional funding for the Paycheck Protection Program, with $30 billion for CDFIs, community-based lenders, small banks, and small credit unions, and $30 billion for mid-sized banks and credit unions. It also includes $50 billion for SBA emergency disaster loans and $10 billion for SBA emergency disaster grants. In addition, it provides $75 billion in resources for hospitals, health systems, and frontline workers and $25 billion for testing pursuant to a strategic testing plan. H.R. 266 will require the Administration to issue reports on COVID-19 testing, cases, hospitalizations, and deaths, including data on demographic characteristics such as race, ethnicity, age, sex, and geographic region.

On the agriculture specific front, all eyes are on USDA. On Friday evening, USDA Secretary Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP). CFAP is a $19 billion package of assistance including direct payments to agricultural producers for actual losses across a broad spectrum of commodities, and USDA purchases of certain commodities for donation to food banks and other feeding programs. 

Although many details of the program are uncertain and will not be final until regulations are approved, direct payment to producers is expected to provide a total of $16 billion in support. Other expected parameters such as payment limits are $125,000 per commodity, with a maximum per person/entity total payment limit of $250,000. Although it is not possible to determine exact benefits for specific commodities or individual producers due to the lack of details regarding assumptions such as actual prices and quantities used in the formation of the program at this time, USDA has indicated they are expediting the rulemaking process and further details are expected soon.

Another component of the CFAP is a $3 Billion commodity purchase program, which will include fresh fruits and vegetables, dairy products, and meat products.