Market Update: Rice Farmers Making Planting Decisions, Large Crop Anticipated

February 23, 2024
The market looks much like it did last week — which is great news! Exports continue to race ahead of last year, prices on the ground are firm, and expectations for a crop above 3 million acres for next year remain attainable. Despite the large increase, medium grain acres in the southern states are expected to drop because California is coming back in full force of its historical production. Reports from the West Coast indicate that without a late weather event that would initiate preventative planting, another crop over 500,000 acres is all but guaranteed. With planting decisions in the south being made at the moment, California farmers have until June 1 to plant. It would appear that long grain will be the safer play in the coming season, with the hope that growing conditions and quality will improve.
Cash prices have remained firm as rice in first hands is dwindling in some regions. Prices in Texas punctuate this point where prices are as high as $19/cwt, but largely because supply is running so low for spot market purchases. Louisiana is reporting at just over $18.50/cwt, while Mississippi, Arkansas, and Missouri are all at $18.25/cwt.
In Asia, the price correction in Thailand continues with reports now pegging prices from the origin just below $620 pmt. Vietnam remains more competitive at prices closer to $615 pmt, but the convergence is expected and welcomed; it was strange seeing such a gap between the two countries, and even more so with India out of the market.
The futures market was active this week, with average daily volume jumping 172% to 2,348. Open interest was sideways at 12,133 for a 1.87% increase.U.S. Export Sales 2/23/2024
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