Market Update: U.S. Export Sales Down 10%; Exports Shipped Down 48% from Previous Week

May 5, 2023
The crop continues to be sown nationwide, with Louisiana now showing 89% planted and 83% emerged. Texas is 83/69, and Arkansas is progressing nicely at 68/34. Missouri was able to get more rice in the ground much earlier than normal, but cold weather is keeping progress at bay; reports show 73% planted and only 31% emerged. Mississippi registered at 53/32 this week, and California finally got on the board at 5% planted with nothing emerged so far. In California, the concern has been realized as wet and cold weather has persisted, thereby slowing planting. There are reports of severe thunder cells opening up over rice regions on the west side of the Sacramento River; this will only put large farmers further behind and most likely result in a reduction of acreage come June 1.
In light of the attention given the medium grain market this year, a GAIN report on Australia was released this week. Post estimates milled rice production at 500,000 MT for 2023/24, up 39% from the 2022/23 estimate. It’s important to remember that this is talking about a crop that will be planted in October 2023, assuming good conditions persist and ample water supplies remain. Australia has largely been out of the medium grain export game for the last five years, except for a few boats to California this year, and a return to 500,000 MT would be almost 40% more than the previous 10 year average and the largest crop since 2016/17. Perhaps the most significant news coming from the report is that 500,000 MT is expected to be on the top end of Australian rice production moving forward on account of increased competition by other crops and water resources in Australia. Post predicts that Australia will export just over half of their production at 280,000 MT next year.
In Asia, prices remain buoyant on firm demand, though there are reports it may be weakening in the coming weeks. Thai 5% is holding at $495 pmt, while Viet 5% is at $485 pmt. Indian rice is quoted at $440 pmt, but there appears to be more sluggish demand in the current market environment when contrasted with the high activity from the previous weeks. Both Vietnam and Thailand are on track to equal last year's export numbers, but this small lull in demand may result in a game of catch-up in the coming months.
The weekly USDA export sales report showed net sales of 46,600 MT for this week, down 10% last week and 7% from the 4-week average. Exports of 41,500 MT were down 48% from the previous week and 12% from the prior 4-week average.
The futures market has seen some volatility in recent weeks, and seems to finally have settled down a bit. Average daily volume dropped 12% to 713, and Open Interest dropped just 1.5% down to 7,347.
The upcoming Rice Market & Technology Convention in Puerto Vallarta, Mexico, May 30-June 1 will give a good indication of the outlook for U.S. exports to what has been the most important long grain markets.
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