Rice Market: Wild Trade with Large Ranges

    ©Debra L Ferguson Stock Photography

    “WILD” best describes this week’s trading in the rice market.  As of Thursday’s close, the week’s trading range for the September contract had been $1.28/cwt.  The week started with relatively heavy volume and very wide trading ranges.

    Monday we saw the September ’22 contract push to a new high of $18.19 ½ ; very close to the September 2011 high of $18.25 ½.  Tuesday offered more of the same with volume close to 600 contracts (significant in rice trading at least) and a wide $1.03 trading range that extended up to $18.08.

    CME September Rice Futures 15-Year Monthly Chart

    CME September Rice Futures, 15-Year Monthly Chart. Click Image to Enlarge

     The rice market started the week trying to figure out what’s next in global grain trade.  Last Friday, May 13, the Indian government announced a ban on wheat exports, effective immediately.  The decision stems from a smaller-than-expected wheat harvest.  This poses some food security risks to India.  It’s very likely those in the rice market were wondering early week if export bans or possibly quotas, may later extend to other grains.

    Also, there were a few large international inquiries for rice this week.  South Korea issued a tender to purchase around 136,000 tons of rice.  Egypt was in the market for at least 25,000 tons of milled rice.

    Progress in Midsouth planting put pressure on the rice market Tuesday/Wednesday with lower closes both days.  However, the September contract closed almost 20 cents higher Thursday at $17.23.  As of Friday morning, new crop rice bids were in the $7.65 to $7.70/bu. range for fall delivery to mills around eastern Arkansas.  Fall delivery bids at driers were in the $7.50 to $7.60/bu range.

    Fertilizer Market:

    One news item of interest this week was the announcement by the Russian government to extend fertilizer export quotas from June 1 until at least December 2022.

    New Orleans (NOLA) urea is trading about $15/ton lower this week.  Phosphate from China is gradually moving into Brazil.  Potash and phosphate prices were $30 to $45/ton lower this week at NOLA and further inland.

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