Market Update: Final Weeks of U.S. Long Grain Planting; California Further Behind

May 10, 2024
Producers remain optimistic when surveying the landscape of the coming year. With a strong crop being planted here in the U.S., and a weaker-than-expected harvest in South America, prices look poised to weather whatever storms the market might bring. Even with political tensions straining milled exports to Haiti and Iraq, strong domestic business coupled with stable paddy exports offers a great foundation for the coming year.

The most recent FAO Rice Price Update for May was just released and shows an All Rice Price Index of 135.7, which is down 1.8% from the prior month, but still 9.2% above this time last year. Minor price drops in the heavily weighted long grain rice out of Thailand and Vietnam are responsible for the drop this month, whereas significant price drops in the lighter-weight japonica varieties caused the drop last month. The FAO reports that the export quotations slid 4% in March levels in Thailand because of new crop arrivals and the depreciation of the Thai Baht against the U.S. dollar.

While the FAO report gives us a solid look back at the last 30 days, current pricing in Asia just breached the $600 pmt levels again in Thailand on strong demand from core markets. While Viet prices haven’t bumped quite to $600 pmt yet, they are certainly flirting with the line. The big question that still pervades the market is what will happen when India removes or relaxes their export ban.

Today’s USDA WASDE report, to be released at 12:00 pm ET, is expected to increase supply. Let’s see how the market trades as crop conditions and projected production become increasingly important.
In the Western Hemisphere, a strong U.S. crop is being offset by a poor harvest in many South American countries and severe flooding in Brazil. Our hearts go out to the families and communities struggling through the historic floods, and we wish for a speedy recovery. As it pertains to the rice market though, this means that the U.S. will remain the primary exporter in the Western Hemisphere, and the size of the crop is up for the challenge. Most recent industry estimates peg the total U.S. acreage at 3.02 million acres, split up with approx 620,000 acres of Medium grain, and 2.4 million acres of long grain.

The most recent Crop Progress report shows plantings and emergence are well ahead of schedule, where we are 78% planted compared to a 5-year average of 60%, and 60% emerged with a 5-year average of 39%. Arkansas is 90% planted with 71% emerged, California is 20/0, Louisiana is 95/87, Mississippi is 62/42, Missouri is 77/41, and Texas is 90/78. Crop condition reporting has just begun with the majority in the Fair to Good columns, but we will wait a few more weeks before giving too much credence here. The big story on the ground is the huge storm that rolled through California over the weekend, drenching 2” in some places and putting planting even further behind than it already was.
Pictures at South Louisiana Rail Facility, loading out the last of the 2023 crop and making way for 2024. The MV Nordic Malmoe is headed to Mexico as farmers in SW Louisiana hope for good harvest results this year
The weekly USDA export sales report shows net sales of 8,300 MT this week, down 86% from the previous week and 78% from the prior 4-week average. Exports of 17,700 MT were down 79% from the previous week and 75% from the prior 4-week average.
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