Ground is being worked up throughout the delta in the midst of global uncertainty. Farmers have never been so indecisive in the past 25+ years. Fuel and fertilizer costs continue to be a moving target even as rice is going in the ground.
Expectations remain that the crop will be approximately 15% smaller than last year, which is keeping upward pressure on paddy prices at the moment. Next week’s USDA acreage report will reflect the situation. In Texas, prices have jumped up to $17/cwt. In Mississippi, Arkansas, and Missouri, prices are in the $15-$15.75/cwt range.
Further bolstering higher paddy prices is the drought in the Mercosur, where Brazil’s rice production is still a big question mark. This will likely create opportunity for milled long grain to re-enter some of the markets that Brazil has encroached on in recent years.
In Asia, the market has been holding steady with each passing week. Prices in Thailand are unchanged from last week at $417 pmt. Viet pricing sits at $420 pmt, also unchanged. India is also the same as last week, registering at $355 pmt, and Pakistan just below at $350 pmt. The crisis in Ukraine has not significantly impacted the international rice trade yet, as the major volatility has been hyper-focused on wheat and fertilizer.
Good news coming out of Europe in that the U.K. retaliatory duties on U.S. rice are expected to be lifted on June 1. While the U.K. is not a large consumer of U.S. rice, it has consumed a significant portion, and not capturing this business since June of 2018 has hit the U.S. market unfavorably.
But with free access returning, there is optimism that reinvigorating this long-term relationship will help support milled rice prices for the U.S. industry.
Rice News on AgFax
Unable to display feed at this time.
A GAIN report was published for Pakistan this week, and it shows record production of 9 million metric tons coming from the region. The increased production is based on better varieties with higher yields, and better agronomic practices being introduced.
This increased production corresponds to an expected increase in exports, pegged at 5 MMT for the coming year. Most of this rice will find its way to China, Kenya, UAE, Afghanistan, and Saudi Arabia.
The weekly USDA Export Sales report shows net sales of 83,800 MT, which is up noticeably from the previous week and up 44% from the prior 4-week average. Increases were primarily for Japan (38,000 MT), Colombia (22,000 MT), Haiti (15,200 MT, including decreases of 100 MT), Canada (2,200 MT), and El Salvador (1,500 MT). Exports of 54,400 MT were down 8% from the previous week and 22% from the prior 4-week average. The destinations were primarily to Mexico (27,800 MT), Honduras (12,100 MT), Haiti (7,100 MT), Canada (3,000 MT), and Jordan (1,400 MT).
In the futures market, average daily volume dropped 23%, down to 411. Open Interest held steady, dropping only 1% down to 9,701. The May 22 contract increased slightly, now up to $16.01, with the Mar 23 contract increasing up to $16.315.