USDA’s World Market Price factors were again left unchanged by USDA this week. The on-farm value of long grain rough holds at $11.80 per cwt.
Rice futures took a bit of a beating this week, mostly, we think, reflecting the pressure put on by the grains and soybeans. Even though the nearby Nov contract settled at 12.49, which was 16.5 cents below last Friday’s finish, the continuation chart still shows support holding in the 12.50 area.
Rice futures did not fall nearly as far or as hard as grains and soybeans, and that’s encouraging. Also we believe that the 12.50 area is at or below (probably below) an “average” breakeven number for cash producers. There is no guarantee that new lows will not be seen, but the market has demonstrated to us that the 12.50 neighborhood is an area where selling seems to slow considerably.
In a reasonable pattern of thought, some are concerned about how all the grain and soybean futures will react after the monthly Supply/Demand Report due out next Thursday. Many are expecting big numbers in soybeans, although rice may not show a big pickup. But who knows – it is USDA after all, and they have had a distinctly positive (to supply) bent in their reporting since 2008 as we see it.
There are still no (zero) deliverable certificates registered in Chicago, and that makes shorting this market riskier. We suggest avoiding the short side of the rice futures; but as we noted last week, being long may take some patience – and maybe some margin call money, too. If trading rice or any other futures contracts, use calm decision making and good money management before taking any positions.
Net export sales for the week came in at a good 55,700 tons. Long grain rough made up 17,500 tons shared by Costa Rica with 10,000 tons, El Salvador with 7,800 tons, Guatemala with 1,500 tons, and Mexico with 100 tons. Long grain milled and brown totaled 9,200 tons, with Mexico and Canada being the lead buyers with 4,200 tons and 3,900 tons respectively.
A nice slug of medium/short rough was bought by Turkey to the tune of 20,000 tons, and this was added to by 9,000 tons of milled where the main buyers were South Korea for 4,500 tons, Saudi Arabia for 2,000 tons, and Canada for 900 tons; Taiwan and Russia each bought 400 tons.
Export liftings for the week totaled 41,500 tons, over half of which was long grain rough bound for Mexico (17,800 tons), El Salvador (4,800 tons), and Guatemala (1,500 tons). Long grain milled and brown shipments totaled 12,900 tons, with Haiti being the largest consignee (8,800 tons), followed by Mexico (1,700 tons), and Canada (900 tons milled and 200 tons brown). Medium/short grain milled shipments totaled 4,500 tons and included 2,000 tons to Jordan and 1,200 tons to Canada.
Prices in Asia held or maybe eased just a little this week. Thai 100% Grade B is called $445 per ton fob vessel, and parboiled is now $435 per ton. Viet 5% milled held at $450 per ton. Pakistani long grain called $420 per ton. Indian prices were slightly better on 5% milled at $445 per ton and on its parboiled at $435 per ton.