|More reports are coming in of an average to above average crop, which is great news for mills looking for head rice, and producers looking for yields. The domestic business remains steady, and the boost from Iraq is just what the mills need to keep busy through the balance of the calendar year. Prices on the ground for spot prices have remained consistent, which provides a nice backdrop for producers moving through harvest in Louisiana and Texas. Arkansas and California are looking to get in the field the first week of September, and many in Mississippi are ready to start, but untimely rains are getting in the way.|
Texas is getting close to being finished, with less than 25% predicted to still be in the field, while the USDA is reporting only 66% harvested this week. Yields for hybrids have been reported as strong, but some of the conventional varieties were hit by the weather which has made the harvest season difficult. Prices have held at the $17.50/$18 range for hybrids and conventional respectively. Louisiana is also receiving rains, with prices reflecting a $17.30 price this week. Overall though, harvest is progressing smoothly and yields have been strong, with the USDA showing 60% harvested, though it’s likely at least 10% beyond that at this point. Arkansas is of course behind Texas and Louisiana, with harvest expected to start in earnest the first week of September. Producers are optimistic about their crop and have confidence it will at least be average. The USDA shows the crop is 89% headed, with 24% showing fair, 53% good, and 19% excellent.
In Asia, prices held steady this week in Thailand, registering at $425 pmt, and the market looking steady at these prices with plenty of supply heading into Q4. Vietnam had a significant drop, falling from $420 last week to about $405 this week on account of a brief respite in an incredibly busy schedule. The long-term demand is there, but it’s almost as if the loadings are taking a quick breather. India hasn’t slowed down and continues to ship rice at breakneck speeds at $355 pmt. As discussed before, these low prices from India have kept a lid on all rice prices in the Eastern hemisphere.
The futures market has performed quite well this week, showing strong pricing and activity. The only concern here, however, is that the futures prices support only domestic pricing. There isn’t sufficient export activity at these prices, especially when considering the intrusion from cheaper origins in Latin countries that are chipping away at the historical core customer base of US long grain customers. The average daily volume was up to 2,005 this week, an increase of 61%. Open interest was 8,885, an increase of 1%.