Market Update: U.S. Rice Crop Off to Good Start

June 21, 2024
The Western Hemisphere market was covered thoroughly at the RMTC, where the situation in Brazil was dissected, analyzed, and discussed on the stage and over coffee. Paraguay will send all of its exportable supply straight there, as will most other countries with excess. The U.S. will have much better luck at landing paddy in the flood-stricken region than milled rice, which will help in the disappearance of a large crop that is coming along nicely.

All states are fully planted — including California — where the USDA Crop Progress report shows the west coast medium grain producer is 85% emerged, compared to last year at 88%, and a 5-year average of 91%. The report also shows that overall rice states, 16% of the crop is in excellent condition, 67% in good condition, and 14% in fair condition. These numbers are trending in the right direction, as last year only 56% was good and 29% was fair at the same point in time. Right now, only Louisiana and Texas are showing emergence, with 25% and 31% respectively.

On the ground, new crop offers are beginning to surface, though action has been relatively light as of now. With so much yet to develop in Brazil and the overall demand situation, many producers are adopting a “wait and see” attitude for the next few weeks. Iraq and Haiti are not bright spots in the milled market, while Mexico and Brazil offer a counterbalance of positivity in paddy exports.
In Asia, the persistent spread between Thai and Vietnamese prices is the main news. With Thai rice holding a nearly $50 pmt premium to Viet rice for weeks now, we expect to see demand shift to the cheaper origin in the coming days. Right now, Thai rice is $620 pmt, while Viet is still sub-$600 at $575 pmt. Pakistan is in the mix with prices at $590, and the primary concern with a shipment to Haiti, which will impede U.S. exports.

The WASDE report released last week calls for reduced supplies, even domestic use and exports, with slightly lower ending stocks in the U.S. The stocks were reduced as a result of a 1 million cwt increase in long-grain exports. The 2024/25 season average farm price held firm at $15.60/cwt. From a global perspective, the WASDE points up on most points with increased supplies, consumption, trade, and ending stocks. Most of the increase in supply comes from India and Pakistan, with India also accounting for increased ending stocks.

With the excitement of the RMTC, we are bringing the FAO Rice Price Update to you a little later than normal. The FAO Rice Price Index averaged 127.3 points for the month of May, up 1.3% from April and 7.5% above last year. Long grain prices out of Thailand accounted for the increase, where they continue to hold firm at prices well in excess of $610 pmt. The strength in this market can be attributed to the continued demand for Indonesia’s BULOG, and Brazil now searching out Asian rice.

This year is shaping up to be quite interesting, and is perhaps best framed by a series of questions: Thai rice to Brazil? Pakistani rice to Haiti? Is U.S. rice unable to ship to Iraq? Will there be a new Farm Bill? Will U.S. prices be competitive with the value of the dollar in an election year? These are all exciting topics that we will navigate day by day, while we look forward to a full crop for the first time in years.
One final note: India’s Commerce Ministry will take up the issue of rice export curbs with a government panel. Read More Here.
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