CASH MARKET
Thai rice prices have remained steady to higher for 3 weeks. White 5% is up to $404. Thai officials still believe they can export 11 MM tons because China, Malaysia, and Philippines are still importing.
Indian prices have continued to rise as exports and domestic demand is strong. Indian export prices have hit a three month high. Vietnam prices are declining as China has been buying from other countries.
US rice is bid at $10.50 cwt at the Texas Gulf Coast. This may be a fleeting bid but more than one elevator was aggressively seeking rice all last week. Dr. Bobby Coats from University of Arkansas believes world-rice-stocks, especially in China are very high. He cautioned US growers about planting too much rice.
FUTURES MARKET
US Future markets have been in the 60 cent trading range since October. January futures are well supported at $10.40 cwt and not able to get above $11.10 cwt.
There is plenty of demand in the world from Panama, Iraq, Indonesia, Philippines, and Mexico. The technical picture is encouraging as we still are building an extended right shoulder on a big Head and Shoulders formation. IF and that is a big “IF”, January futures rally above $11.20 cwt, we could see a major rally above $12.00 cwt. Right now CBOT has 14 rice contracts registered for delivery. They are all at McGehee, Arkansas and therefore could be shipped down the river any day.
The Chinese have begun buying US Soybeans again after the G-20 Meeting. Hope springs eternal that the US can sell rice to China.
If soybean prices rally, then maybe we can see less rice acres in spring of 2019. The shift from LaNiña to El Niño will bring weather challenges to some rice growing countries. If US rice acres do not increase we can see a good rally.
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.
** Futures and options trading involve significant risk of loss and may not be suitable for everyone.
