| A lot is happening in the global marketplace for rice on the geopolitical front, but perhaps none more powerful than the continued strength of the U.S. dollar against other major currencies. Despite what feels like domestic volatility and upheaval, the dollar has been extremely resilient and remains strong globally. While this is great for the travel budget when vacationing in other countries, it does not bode well for our exports. With the largest crop in recent years coming along nicely, the dollar's value could significantly impact our ability to access key export markets like Haiti, Iraq, and Mexico, even if the geopolitical tensions clear up in the coming days. Iraq, for example, is increasing its procurements from Thailand, which is taking the place of the MOU for U.S. rice that is now dead in the water because of banking restrictions. And even if Haiti can miraculously find peace and stability, a strong dollar may incent them to find rice alternative origins like Pakistan. And even Brazil to everyone’s surprise, in the face of catastrophic flooding and loss of rice, is exporting in the current market perhaps because of currency valuations although a limited volume. The case of Brazil continues to be an interesting case of rice politics as the government as well as the industry manage the supply/demand situation. New crop planting will begin in Mercosur in two months and a large crop is anticipated. All this to say, it will be an interesting year navigating the global rice markets. We are thankful for a steady domestic market, and the strong relationships that USRPA has built over the years in the export market. Despite the challenges looking ahead, the price remains resilient, and we are optimistic about an updated Farm Bill that will reflect the current environment regarding the market, cost of inputs, etc. This may become an extremely key factor, as rumblings of India making some sort of announcement on their export ban are beginning to surface. Some reports say they will hold their ban into 2025, while others are saying the ban will be relaxed. We know that India's releasing their stocks will hurt global pricing, even if they put a minimum export price in place. This will impact Pakistan, Vietnam, and Thailand more than the U.S., but will nonetheless indirectly move the needle for the entire rice basket. On the ground, old crops are extremely scarce, but for indicative purposes, it’s $19/cwt in Texas and $18.52/cwt in Louisiana. New crop is called at $16.50/cwt and $16.10/cwt, respectively. There is no price for the old crops in Mississippi, Arkansas, or Missouri, and the new crop is being called at $15.25/cwt. The damage along the Texas Gulf Coast this week from Hurricane Beryl resulted in 7 deaths, widespread power outages, and destruction of personal and commercial properties in some areas more than others. Damage to the rice crop is noted in El Campo and other areas west of Houston. Rice is flattened or leaning. Drained fields were hit the hardest and expected shattering will affect yields. East of Houston indicates a similar situation, but most are saying it could have been worse. |
| Rice fields in Brazoria County south of Houston took a whipping from the winds of Beryl this week. |
| As we get deeper into the growing season, we continue to see positive trends with 17% of the overall crop holding steady in the excellent category, and 64% looking good. Last year only 61% of the crop was reported good at this time, and we all know how poor the milling quality was—let us hope this bump compared to last year translates into much better milling quality as well. Looking deeper, this year only 16% is rated fair, compared to last year at 20%, so overall good news is coming from the ground. All states, even Missouri at 3% now have rice headed. Texas is in the lead at 78%, followed by Louisiana at 60%, Mississippi at 40%, Arkansas at 22% and California at 15%. The weekly USDA export sales report shows net sales of 27,900 MT this week, unchanged from last week but down 42% from the prior 4-week average. Total net sales of 29,300 MT were up 40% from the previous week and 13% from the prior 4-week average |
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