Aside from weather concerns along the coast, the rice industry has again slowed to a crawl as the trade digests the harvest data and begins to position itself for the marketing year. Export sales for the week were up significantly, largely a result of more rice being available to ship. This week noted a marketing year high at 258,000 MT. Vessel loadings did not respond in kind but were also up significantly over the previous week’s volume. The next few weeks should see notable increases in export loadings as new sales are shipped to end users. 

Benchmark Asian pricing has changed very little over the week with modest fluctuations a result of exchange rate differences. The USDA increased its world market price estimate for the week for both classes, suggesting that global firming of the marketing equation is widespread. 

The domestic cash markets have been somewhat muted over the past week, with values changing very little. Growers are rather entrenched at their pricing targets and the buying side of the market is adjusting. Early quality reports from Arkansas indicate that while field yields were not as strong as was initially hoped, milling outturns and quality have held up to standard. Even with average field yields still translates into a very large 2020 rice crop. Along the Gulf Coast, the industry is bracing for Hurricane Delta to make landfall, especially in Louisiana. The next report will have more details as to that storm’s impact on the trade. 

The futures market for the week posted very modest net gains on all of the open contracts on the board. Gains were largely a result of the surge in values across the other grain markets as those moves were transposed into rice. The average daily volume for the week was higher than in the last traded week, although daily open interest was lower at the weekly close. USDA also released its monthly supply and demand estimate for the month of October this week. On the supply side, beginning stocks were decreased by 2 million hundredweights while imports were increased by 0.8 million hundredweights (almost exclusively medium/short grain imports). Production was also increased based on the projection of a larger harvested area. Long grain production was increased while medium/short grain production was decreased, with a resulting net impact of 6.9 million hundredweights in additional production to the balance sheet. On the demand side domestic use and exports were each increased by 2 million hundredweights respectively. The net impact of all revisions was an increase in ending stocks by 1.6 million hundredweights and a decrease in the season average farm price by $0.10 to $12.60.

Each October, the China tariff authority announces its plan of TRQ for major grains for the next year. Recently, the China National Development and Reform Commission announced detailed rules for the application and allocation of import tariff-rate quotas (TRQs) for major grains including rice.

TRQ of rice remains unchanged for 2020, which totals 5.32 million tons (2.66 million tons of long grain rice and 2.66 million tons of medium and short grain rice). State-owned enterprises control 50% of the rice TRQ. Normally, long grain TRQ is fully subscribed and medium grain is not fully subscribed.

This week, President Trump tweeted that he was ending discussions with House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on another widespread economic stimulus package. Discussions on a compromise agreement which included the HEROES Act 2.0 (the bill introduced and passed by House Democrats last week) were stalled amidst disagreements over funding items such as funding for state and local governments. President Trump then reconsidered with another tweet saying he would consider a slimmed-down stimulus package or stand-alone bill to aid the airline industry along with additional funding for the Paycheck Protection Program.

With less than four weeks until the election, it is expected that the administration and House Democrats will continue to work to come to an agreement that will provide support to the American people, ailing industries, and boost the economy before November 3. President Trump also said that discussions will include providing another round of $1,200 direct payments.

In addition to negotiations on another stimulus bill, the Senate will focus on confirming Amy Coney Barrett to the Supreme Court. The Senate Judiciary Committee is scheduled to begin the nomination hearings on Monday, October 12.