Market Update: Export Sales Down 48%, Trade Watching Mercosur Harvest Progress

March 22, 2024
Last week we speculated that the WASDE report might significantly lower ending stocks. The stocks were lowered, but not by as much as the industry might speculate. Ending stocks were reduced by 1 million cwt down to 41.5 million cwt, which is still 37% higher than last year. All rice exports were raised by 1 million cwt to 88 million cwt, comprised of a 3 million cwt increase of long grain exports offsetting a 2 million cwt decline of medium/short grain exports. The long grain average price was raised $0.10/cwt up to $16.10, medium/short was raised $0.50/cwt to $18.00, and the California medium grain was raised by $2.00/cwt up to $32.00.
The March Food and Agriculture Organization Rice Price Update shows that the all rice price index averaged 140.5 points in February 2024, 1.6% below January, but 12.3% higher than this time last year. Throughout February, Indica prices remained fairly stable, falling only 1.4%, while fragrant rice popped by 2.7%. The report states that Japonica prices were stable, and there will be a revision in that analysis in their April update as medium grain varieties have seen a more drastic decline in the last 30 days. Prices for long grain softened the most in Vietnam in light of fresh supplies from their harvest even though they won a significant portion of Indonesia’s tenders. All in all, the long grain market has been relatively steady in the last month when one considers the market volatility that we’ve become accustomed to since India’s export ban.
On the ground, pricing remains strong in the spot market when rice can be found. Mississippi is reporting in at $18/cwt, and is expected to begin planting sometime in late March or early April. Texas is well underway, certainly over 10%, and essentially out of cash rice for the spot market. Louisiana is just getting underway with the new planting season, perhaps just broaching the 10% seeded mark. Like Texas, there is not much old crop to be found, with prices around $18.52/cwt. Arkansas and Missouri both sit at $18/cwt over loan, and planting is just around the corner.
The weekly USDA Export Sales report shows net sales of 43,800 MT this week, down 48% from the previous week and 46% from the prior four-week average. Increases primarily for Mexico (37,600 MT), Saudi Arabia (8,600 MT), Japan (6,000 MT), Honduras (5,000 MT), and Canada (1,100 MT, including decreases of 100 MT), were offset by reductions for Jordan (14,000 MT), Guatemala (700 MT), Haiti (500 MT), and El Salvador (300 MT). Exports of 89,600 MT were down 12% from the previous week and 7% from the prior 4-week average. The destinations were primarily to Mexico (44,300 MT), Haiti (27,300 MT), Saudi Arabia (9,900 MT), South Korea (3,400 MT), and Canada (1,900 MT).
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