| With the last two reports focused on external factors instigated by India, we will look more closely at the developing U.S. crop this week. Harvest is underway in Texas where the weather is hotter than expected, which is curing the crop quicker than planned. The good news is that blanks haven’t been reported yet, but it’s still too soon to have any milling yields or qualities. South Arkansas is draining fields already as a result of the heat, possibly pushing harvest up a few days. In Missouri, the crop looks good and if there are any worries, it will be over pollination with some overcast days as of late. The weekly Crop Progress report shows Texas is 88% headed, just 2% shy of the 5-year average of 90%. Arkansas is showing 60%, 14% ahead of the average. Louisiana and Mississippi are right on par with normal, registering 89% and 73% respectively. Missouri is also ahead, showing 54% headed compared to the average of 36%. California, as expected because of the late plant, is 14% behind normal showing a quarter of the crop is headed. The Rice Condition report informs us 79% of the overall crop to be in Good to Excellent condition. Arkansas is reported 33% Fair and below, California 10% Fair and below, Louisiana 39%, Missouri 24%, Mississippi 31%, and Texas 21%. Talk continues to express that acres are up in Arkansas over original estimates and that crop quality looks good, leading to the initial musings of a bumper crop — both in acres and yield. Before an update on India and the excitement coming from the Eastern Hemisphere, we will review a GAIN report just published on Argentina. Rice production in the coming year is forecast at 1.054 MMT rough, which is 19% lower than the official USDA estimate. This reduction is due mostly to a lack of rain to replenish reservoirs and necessary waterways to support production. Projected harvested acres is only 390,000 acres, compared to a normal crop of about 470,000 acres. This 17% reduction in acres has resulted in Post reducing the export expectations for Argentina from 400 TMT down to 230 TMT. This could result in additional demand turning north into the U.S. market. Now for an update on the India/Asia complex where India’s white rice export ban has wreaked havoc on prices and delivery schedules in the last two weeks. Prices in Thailand have shot up to $625 pmt this week, and Vietnam up to $600 pmt. To put that into perspective, prices were $495 pmt and $480 pmt only three months ago, which is a 26% increase for Thai rice and 25% increase for Vietnam. There is no sign for the market to settle, as an additional factor was introduced just this week in Thailand. The Thai government has urged farmers to reduce their rice plantings in an effort to conserve water because rainfall is off nearly 40%. The majority of the rice has already been planted so this request may have a muted impact, but it nonetheless adds fuel to the fire of an already hot market. As prices in the East race to those in the West, and drought impacts production in South America, the U.S. long grain bumper crop could be coming off at just the right time. The weekly USDA Export Sales Report shows net sales of 21,700 MT, up noticeably from the previous week and from the prior 4-week average. Exports of 66,300 MT were up noticeably from the previous week as well, and from the prior 4-week average. |
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