A small number of second crop fields have been cut in Texas, and the news thus far is not very promising.
Some of the early rice has more green, immature kernels than we expected to see this year. Irregular growth in the fields seems to be the cause of this, and some rice has been turned down at mills because of these problems.
There are no public sales this week, but first crop continues to trade fairly steadily at premiums of $6.25 per cwt over loan for conventional varieties and $5.75 over for most hybrids, $5.50 over for XL753.
The rough rice market in south Louisiana is very slow at present – we think due to the expectation of and subsequent disappointment in filling big orders from Iraqi Grain Board purchases that never materialized.
The mills likely maintained long positions before the main harvest began, thinking Iraq would buy big, only to be left with no big Iraqi business, and that has caused both larger mill inventories and smaller than expected export sales. The result is the currently stale market. Price is not the problem, since US long grain is very competitive against our South American competitors.
We just need more demand. At present, $24 to $25 per bbl is noted as the range at which medium grain can be sold, although there seems to be little available for sale. Long grain, however, is a very slow market with price ideas around the $20 per bbl fob farm level. A bid of $12.10 per cwt delivered Mermentau is reported for a 55/70 long grain.
Some folks in the region attended meetings this week to learn more about how the farm bill will work for rice. There were a range of reactions from confused to feeling like the support is far short of what was expected. It looks like everyone realizes that we will all have to wait and see just how it works and what it really means to rice farmers.
As far as the crops go, Mississippi is said to be finished with all except the very last of the rice crop – and all grain crops for that matter. Some report that the rice crop is turning out to be mediocre with milling not quite as good as had been expected.
Overall quality seems to be fine. There was some barge business earlier in the week that produced a bid of around $12.50 per cwt delivered barge loading facility, but that was covered, leaving the market quiet as the week came to a close.
We are told that Arkansas is 99% finished with its rice harvest, with the few acres remaining to be cut slowed by rain earlier this week. Quality of this crop is said to be good overall, but this is also described as a good, normal crop but not an outstanding one. Milling is reported as a bit better than last year’s crop.
Long grain buying interest has been called in the range of $5.50 to $5.65 per bu, but we hear that a little hand-to-mouth type buying is still be seen from some of the smaller domestic mills may be showing slightly higher bids. Medium grain buying interest remains in the $6.50 per bu picked up at the bins area, but we hear there is little being offered (maybe there is little left uncommitted).
Missouri is trying to finish, but weather seems to just keep holding back completion – more rain is in the prediction. This late crop has created some sort of problem in almost every state. We hear reports of the harvest at 80% to 85% complete, but we are also told that a lot of the remaining rice is down rather badly in the fields which makes for slow going and yield and quality losses. To this point, we are told that milling is slightly above average and that field yields have been good. Current bidding is considered low and of little interest to sellers in the neighborhood of $5.30 per bu for early next year or 65 cents under the Nov rice futures basis river delivery.