We learned this week that Iraq did not, in fact, award any contracts on the rice tender. One source said Thailand had the low bid and Iraq hopes that by retendering next week the bids will be even lower.
The absence of any Iraq business to U.S. brokers caused a 0.20 cents CWT drop in future price on Monday. Meanwhile, the weekly export report released on Thursday morning showed a respectable – but not exciting – 47,000 tons of mostly long grain rough rice sold last week. Since the big drop on Monday, rice futures have been on a tight trading range.
Also of note:
- On Friday a big firm from Memphis estimated that China’s rice production would decline 1 mmt in 2017. The same firm predicted an increase in China’s planting of soybeans and corn. It looks like the USA will have a major shift to soybeans. That acreage would have to come from reduced corn and rice planting.
- The bright spot for world rice prices is in India. Strong and sustained demand from east Africa has resulted in a nice rally in India rice prices.
- Some traders were concerned that our new administration’s strained relations with Mexico, resulting in less rice business with our biggest customer. However, there is no way Vietnam or Thailand can compete on freight to Mexico now that we have the train from Lake Charles. I am not worried about losing Mexico exports.
- Now US rice farmers wait for a re-issue of the Iraq tender and hope we can open up business with Cuba.
Markham B. Dossett was a Charter member of the New Orleans Commodity Exchange. He has traded rice since early 1981. He owns Talon Asset Management LLC where he hedges rice, soybeans, corn, wheat, cotton and cattle for producers in the South and Southwest.