The 2020/21 rice crop continues to mature, and based on the latest USDA data, rice headed is significantly ahead of last year at this time, and on pace with the 5-year average. Despite a few weather obstacles along the way, the crop condition also looks more favorable than last year. With the US Independence Day holiday shortening the work week, many growers and marketers abstained from the market, leaving prices of both old crop and new crop largely unchanged from last week.

Along the gulf coast of Louisiana a combine or two are in the field harvesting and some Texas fields are being drained. Hot, dry weather is quickly maturing the crop and the outlook for the week ahead is for that trend to continue. The South Louisiana Rail Facility has confirmed several shipments of new crop paddy for late July, August and into September. New crop sales of Texas rice to area mills are allowing farmers to take advantage of the demand while the effects of COVID-19 continue to create some uncertainty in the marketplace.

After a dismal export sales report last week, net sales were buoyed by fresh demand in Mexico, Saudi Arabia and some Central American countries. On the other hand, shipments were down from last week, and down for the 4-week average. US export prices appear to be holding steady; however other origins continued to soften this week. Asian export prices were down across the board, with Thai 100% B and Myanmar 5% leading the way, down $15 per ton and down $20 per ton, respectively against last week.

This week the June acre report was released by the USDA which publishes the results of grower surveys. According to the report, long grain acres are up 23%, or an additional 414,000 acres, year over year. The report indicates that Arkansas, the largest rice growing state will be up 32% from last year. As for medium grain, the Arkansas medium grain planted area is estimated to be down 10% in 2020, and California acres down 1%. Short grain acres in California look to rebound by 12,000 acres from 2019, ultimately leaving total medium and short grain acres up 1% year over year. While these figures are an improvement from the Prospective Planting report, the industry still anticipates more acres than reflected in this report for all types of rice.

The Rice Stocks report was also published this week, which reflected a 27% decline from June 2019. Long grain rough rice stocks in all positions were down 43% from June 2019 and total medium grain stocks were up 19% year over year which is mostly attributed to Southern medium grain. Rice stocks (milled and paddy) on a paddy basis were only down 86,000 cwts from last year in California, surprising most in the industry. In other words, this report affirms the tightness in the market that has been the topic of much conversation throughout the year.

In the futures market, the open interest held relatively steady, while volume fell by 40%. The nearby contract was up almost 10% against last week, and the new crop contracts also posted minimal gains. Compared to previous weeks, the market was on the quieter side, but that should change as we navigate thru July.