| Last week, we gave a flyover view of the market factors coming into harvest. Those consisted of a large U.S. crop, a strong U.S. dollar, political unrest in our biggest milled markets, a glut of rice in India that could be released, and the potential for an above-average South American crop. That being said, there is room for optimism in the market too. Paddy exports have been strong and look to remain so as soon as new supply is harvested and released into the market. The potential for a much higher quality crop is the real story though. Optimistic sentiments from the ground confirm the USDA reports, particularly in Arkansas, Mississippi, and Missouri. Rice progress and quality continue to blast through last year’s numbers and the 5-year averages. Last year, Arkansas was only 54% headed compared to this week at 75%. California has caught up and surpassed last year because of the heat, now recording 45% headed which is 10% above the 5-year average. The only state that is behind last year and the 5-year average is Louisiana. The quality continues to generate excitement, with 83% of the crop being reported Good or Excellent, compared to last year with only 71%. This year, 14% is reported as Fair, compared to last year at 24%. Poor and Very Poor remain negligible. We can only hope these reports translate into high field yields and milling yields. Any trouble on the ground still lies with the damage done in Texas by Hurricane Beryl, and persistent rains in Louisiana that are having a slight impact on the early harvest. The hope is that the weather will clear up and turn favorable when Louisiana gets into the bulk of its harvest season. In Asia, prices remain flat both in Vietnam and Thailand. Viet prices are holding at $580 pmt, while Thai prices are closer to $575 pmt. There are no big swings in either direction as demand has been relatively constant with no big swings in the last week; however, the potential of India opening up stocks in some capacity is ominously looming over any upward price pressure. The expectation for India is that they would have some sort of limited private sale, but is more likely to facilitate a G2G deal with a large Asian buyer instead of the normal West African buyers it has been working with. While the weekly USDA Export Sales report hit a dismal marketing year low of only 45,300 MT this week, it's important to remember how much more rice we have exported this year than last year. Through April, we have exported nearly 1.5 MMT to our top 10 export partners, compared to only 881 TMT last year. That’s almost a 70% increase! Mexico is our top partner, followed by Venezuela and then Haiti. So while export sales are slow at the moment, we have had a stellar first half of the year when compared to the same time last year. |
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