Volume 17, Issue 27
July 9, 2020
In This Issue:
  • USDA WASDE Report to Offer Final Market Factors Prior to New Crop Harvest
  • FY 2021 Ag Appropriations Bill
  • Texas Rice Update
  • Texas A&M AgriLife Field Day Via Zoom
  • USRPA Board of Directors Embrace New Technology
USDA WASDE Report to Offer Final Market Factors Prior to New Crop Harvest
The rice industry has continued to shuffle along since the last report with very little new information to digest. The trade is waiting for the July WASDE report that will be issued on July 10 as the next (and last) big slug of market influencing factors prior to the advent of new crop harvest. 

In government reports this week, export sales were reported marginally lower than the previous week’s values but remained in positive territory. Old crop has almost certainly hit the “pipeline minimum” which is to say that there is virtually no old crop uncommitted at this time which accounts for a large amount of the lagging export figures. The next 3-4 weeks should see this figure increase as new crop becomes available for shipment. If this comes to pass then we can expect to see stronger exports for the next few months. If it does not, then the dynamics change entirely and the U.S. is at a disadvantage to its export competitors. Time will tell. 

Similarly, the vessel loadings for the week were off for largely the same reasons. Asian benchmark pricing has continued to slide on exchange rate factors as well as the easing of the supply/demand forces that has allowed the market to retract to lower levels. Any shock to either side of the equation in that sphere will most likely have major consequences and for that reason it is the author’s opinion that major potential volatility still exists in those markets. USDA has held its world market price estimate constant for the week, marking the third week in a row of no change. The market is at a tipping point pending the influx of fresh supply so this stasis is unlikely to persist into the coming weeks. 

Domestically, the first fields in Texas and Louisiana have been drained and harvest will commence over the next few days. These first small lots will provide some insight into the quality and yields that can be expected along the Gulf Coast. The Upper Delta is still struggling with weather considerations, although the near-term forecasts suggest that these events may dissipate, providing an opportunity for growers in those areas to make up some time. The adverse weather conditions have undoubtedly impacted quality and yields although the extent of those impacts have yet to be determined. 
From a pricing standpoint, very little has changed from the previous report. The futures market has been active for the week, with the only occurrence of note is the July contract giving way to the September ’20 contract as the new nearby benchmark. This week’s WASDE report, as mentioned earlier, will be a market mover in several regards. The first will be the changing fundamentals in the rice market while the second will be the price impacts that result from changes in the other commodities’ balance sheets. Expected changes to the rice estimate will be increased acreage as the June 30 acreage report is factored in, as well as a potential downward yield adjustment due to the environmental factors in Arkansas, Missouri, and Mississippi. The export figure may also be revised, and the probabilities suggest a decrease at this point. 

History and speculation point to a bearish report but surprises are not uncommon in the July installment. Only time will tell.
Jose Cremades, General Manager of Mexicana de Arroz, S.A. de C.V., a major rice mill in Monterrey, Mexico, enjoys a visit to Texas and South Louisiana this week to see the rice crop. On a farm near Welsh, Louisiana. Jose takes a good look at a field of future early maturing Medium Grain Hybrid from RiceTec with improved grain clarity and milling characteristics.
FY 2021 Ag Appropriations Bill
This week, the House Agriculture Appropriations Subcommittee approved their FY 2021 spending bill. The Agriculture Appropriations bill funding important food and agriculture programs that support animal health programs, agricultural trade, nutrition programs, and rural development. Total discretionary funding in the legislation is $23.98 billion, an increase of $487 million above the FY 2020 enacted level. In total, the bill allows for $153 billion in both discretionary and mandatory funding, an increase of $331 million above the FY 2020 enacted level.

The full Appropriations committee is set to consider the bill on Friday.

Texas Rice Update
By: Dr. M.O. Way, Prof. of Entomology, Texas AgriLife Research & Extension Ctr.
I was called to Chris Latta’s rice farm in Jefferson County last week. Chris and his Dad, Mike, are growing CLXL745. The crop is heading going into milk and looks very good. However, some grains are not filling out on the lower portion of some panicles. I’m not sure of the cause, but some of my colleagues are trying to help me figure this out.

At any rate, Chris’ 15 year-old daughter, Sarah, attends Hamshire-Fannett High School and was the winner (high point individual) of the 2019 Ruben Stringer Memorial Texas Rice Education Contest. Ruben Stringer was a long time Vo-Ag teacher in SE Texas who was instrumental in keeping this Contest alive after Dr. Arlen Klosterboer retired. Mike Broussard is the current Vo-Ag teacher at Hamshire-Fannett High School and has helped me immensely in gathering together FFA Chapters in the region to participate in this annual Contest.

The Contest aims to educate students about Texas rice production. We have written a study guide for the students…here is a link to that guide: https://beaumont.tamu.edu/eLibrary/TexasRiceEducationContest_default.htm.

The students are tested on their knowledge of varieties, the milling process, agronomic practices, pest management issues, etc. A big part of the contest is identification of pest weeds, diseases and insects. So, the students answer written questions, true/false questions and even are tested on their math abilities as applied to common rice farming practices. FFA Chapter winners as well as individual winners are presented awards at the Texas Rice Festival in Winnie during the fall.

So, Sarah came home with the big prize in 2019…a beautiful belt buckle! Oh, by the way, Sarah wants to become a veterinarian. Congrats to Sarah and all the other high school students and Vo-Ag teachers who participate in this Contest! 
High Point Individual Belt Buckle won in 2019 by Sarah Latta
Chris and daughter Sarah Latta in field of CLXL745
Texas A&M AgriLife Field Day Via Zoom
Texas A&M AgriLife Extension hosted a Virtual Rice Field Day this morning thanks to the efforts of Extension Specialist Corrie Bowen and Dr. Ted Wilson from the Beaumont Rice Experiment Station. Sponsored by the Western Rice Belt Conference Committee and the Jefferson County Ag Committee, participants heard research updates followed by a Farm Policy Update from Joe Outlaw, an overview of the Generalized System of Preferences from Bart Fischer, both from A&M’s Agriculture & Food Policy Center. 
Dr. Thomas Wynn from Coastal Rice Futures closed the event with the always popular Rice Market Update & Outlook for Texas rice farmers. Dr. Wynn also serves as the Chairman of the USRPA. 

Unfortunately the traditional barbecue lunch could be a part of this year’s field day!
USRPA Board of Directors Embrace New Technology
The USRPA Board of Directors and staff met this week via Zoom for their annual summer Board Meeting. Chairman Thomas Wynn guided the group through a series of important topics. After the various individual rice state reports, Dwight Roberts and Marcela Garcia gave a financial update and current activities ahead depending on the situation surrounding COVID-19. The group held a lengthy discussion regarding the organization’s relationship with USA Rice and the efforts to improve joint activities in the marketplace. 

Vernie Hubert and Alice Gomez gave a thorough update on issues going on in Washington, D.C., both on Capitol Hill and in federal agencies including a number of trade issues involving Mexico, Central America and the Generalized System of Preferences and the USRPA’s comments submitted to the USTR. 

Bianka Rodriguez and Grace Wang updated board members on programs coordinated and funded by the USDA’s Foreign Agricultural Service and farmer check-off dollars in Latin America, China, Morocco and other markets.
Upcoming Events
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.

August 20, 2020
Missouri Rice Research and Merchandising Council Field Day
More Information Coming Soon.
China’s 2020/21 feed and residual use for all coarse grains and feed-quality wheat are forecast to increase about 5 percent compared to the previous marketing year due to a projected recovery of swine production and strong expansion in the poultry and ruminant sectors. 
Guatemala is a net rice importer, and harvested area is shrinking. There are WTO quotas for white corn, yellow corn, paddy rice, and milled rice.
FAS Seoul’s MY 2020/21 Korean rice production forecast is 3.86 million metric tons (MMT) – up three percent from the initial estimate – due to higher than expected actual planted area.

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