After a 6-week absence, we finally got to see September rice trade above $17 again. The contract gained a combined 63 cents in Monday and Tuesday’s trading. By Wednesday, news surfaced that Iraq had purchased 40,000 MT of U.S. long-grain milled rice. This was welcome news as the last sale to Iraq occurred in November 2021. Shipment of this sale is expected in October.
The figure below of World Rice Prices illustrates how difficult it has been for the U.S. to compete in large overseas tenders. In the past month, U.S. quotes (red line) rose $10 to $705/ton, while trading at no less than $600/ton over the past year. The competition for Iraq’s business has been stiff with Thai quotes (black line) at $428/ton due to large stocks and a weakening currency.
Rice harvest is underway in Louisiana and Texas. No official word yet on yields. The biggest market driver early in the week was the Iraq news. Trading has turned quiet following the official announcement of the sale. Other grains, particularly corn and wheat, have turned lower on the prospect of grain shipments from Ukraine resuming.
From a technical standpoint, the September contract needs to close above $17.30 ½ to continue higher. Following Monday’s high, trading has devolved into a narrower range, lower volume downtrend. This has a created a “pennant” chart formation. Watch for a close above $17.30 ½ for hints of a possible return to the $17.80 area. We’re also watching the red, 50-day moving average at $16.93 as near-term price support.