Volume 17, Issue 19
May 14, 2020
In This Issue:
  • Market Update: Rice Keeping the Food Supply Chain Moving
  • Washington DC Update
Market Update: Rice Keeping the Food Chain Supply Moving
Rough rice trading was scarce this week due to the lack of inventory. Planting efforts throughout the delta has the attention of farmers, the milling industry, exporters and foreign buyers especially in Mexico and Central America. The poor weather conditions that continue to impede planting in Arkansas, Missouri, and Mississippi could not only result in prevented planting, but also negatively impact the crop’s condition. An increase of 20-25% in long grain acres has been the intention all along however the remaining unplanted acreage has approximately a two-week window of time remaining while the rain continues to be a hindrance.

Export sales appear to be an accurate indicator of the current supply situation; export sales fell to a marketing year low of 28,200 MT amid tight supplies. Shipping against outstanding sales held steady this week at 75,200 MT. On a paddy basis, total outstanding sales were reported to be 29.7 million cwts compared to the 26.8 million cwts at this time last year, so steady shipments are likely to continue in coming weeks.

In this month’s World Agriculture Supply & Demand Estimate report, the USDA took its first stab at the 2020/21 marketing year and made only a few, relatively insignificant changes to its 2019/20 projections.

With regards to the global rice projections for the 2020/21 marketing year, the USDA projects beginning supply to be up 1.7% year over year. Meanwhile, total consumption is expected to grow by 8 MMT, which still leaves ending stocks to be roughly 4 MMT higher than last year.

As for the US, the USDA lowered its long grain export forecast by 1 million cwts which brought up ending stocks to 14.7 million cwts. Despite this being a considerably tight carry over, the season average farm price was lowered by $0.20 per cwt. The 2020/21 forecast calls for higher production, higher exports & domestic use, and higher stocks. The higher stocks projection was accompanied by a lower season average farm price estimate. Medium grain prices are currently projected to pare last year’s returns despite a 35.7% increase in ending stocks.

Despite soaring food prices around the world, the USDA did not mention or appear to factor in the impact that the Coronavirus outbreak will have on rice in the new marketing year. According to the FAO, the world is experiencing a rather unique food crisis, where food supply is not the primary contributor, at least not right now. The larger factors pertain to infrastructure issues that are preventing the delivery of food, shrinking incomes, rising food costs and devaluing currencies. Furthermore, the World Food Program has raised concern that more than 30 countries could be facing famine by the end of the year, which could put more strain on the supply side of the food crisis.

Traditional buyers of US long grain rice in Mexico and Central America have their focus on Mercosur suppliers as governments throughout the Western Hemisphere manage the concern for food security. The coronavirus impact in Latin America, especially in Mexico and Brazil, has gone to another level over the past 5 days and is causing increased panic and hoarding as a result of the increasing number of fatalities. Keeping the food supply operating will be even more important as a growing number of people become desperate for food in numerous countries, once again making rice a vital food commodity.

Rice futures contracts gained against last week across the board, with the nearby contract up 3.71%, ending the session at $17.42 per up cwt. Open interest was relatively unchanged from last week, but average volume was up 35.7%.

Federal COVID-19 relief for farmers, ranchers
The Texas A&M Agricultural and Food Policy Center has developed a briefing paper that identifies provisions most applicable to agricultural producers in the three recent Congressional interventions to stimulate the economy and provide COVID-19 relief.
Washington Update
The U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) and Farm Service Agency (FSA) hosted a webinar today, Thursday, May 14, 2020, for farmers, ranchers and other producers interested in applying for direct payments through the Coronavirus Food Assistance Program (CFAP). The webinar was intended for producers to learn about the general application process and required documentation prior to the official beginning of signup. The webinar focused on what information is needed to apply for direct payments through CFAP, once the application period begins. More details about CFAP direct payments will be announced soon.

CFAP is part of President Trump and Secretary Perdue’s April 17 announcement of a $19 billion Coronavirus Farm Assistance Program. USDA will provide $16 billion in direct support based on losses for agricultural producers where prices and market supply chains have been impacted. Also, USDA will assist eligible producers facing additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19. The SBA duplication rule does not apply to this program or FSA loans – Businesses that received PPP or EIDL support are eligible.

A recording of the webinar, the answers to its questions, and other CFAP information can be found at  farmers.gov/CFAP
Follow #OurFarmers During #Plant2020
It’s planting season, and our team is closely following spring planting across the country. We encourage you to follow along with our  #plant2020 campaign , or even better, send us photos of how planting is going on your farm.
Upcoming Events
May 20, 2020
National Feed & Grain Association Webinar: 2:00 pm - 3:00 pm
COVID-19 Updates for Grain, Feed and Processing Industry: OSHA Guidance and Workplace Health and Safety Issues

June 30, 2020
Texas A&M AgriLife Research Extension Rice Field Day
David R. Wintermann Rice Research Station, FM 202 just north of Eagle Lake, Texas. Field tour in late afternoon, then move to the Eagle Lake Community Center for dinner and a business meeting. More details to come.

July 1, 2020
H. Rouse Caffey Rice Research Station Annual Field Day
Crowley, Louisiana. Tours early in the morning, followed by presentations inside. Check back later for more information.

July 9, 2020
73rd Texas A&M AgriLife Research Extension Rice Field Day
Texas A&M AgriLife Research and Extension Center, 1509 Aggie Drive in Beaumont, Texas. More details to come.

July 23, 2020
University of Arkansas Row Crops Field Day
Rohwer Research Station
140 Experiment Station Loop, Watson, Arkansas – check back later for more information.

August 5, 2020
University of Arkansas Row Crops Field Day
Northeast Research & Extension Center
1241 W. County Road 780, Keiser, Arkansas – check back later for more information.

August 7, 2020
University of Arkansas Rice Field Day
Rice Research & Extension Center, Stuttgart, Arkansas – check back later for more information.
World Agricultural Production
Grain: World Markets and Trade
Legislative Update

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