We have been reporting that demand has remained fairly steady, and this is the week where we change our tone; signals in the export market indicate that demand is weakening. Even if mills are busy with old business, selling barges and generating new business is increasingly difficult. The two main culprits are oversupply and poor quality. Having poor quality is a long-term problem that requires attention, but when it’s coupled with multiple replacement options that possess higher quality characteristics at a lower price point (think Mercosur origins), it spells bad news for the short term. One of the only spots to find reprieve right now is the potential for decreased plantings, and the hope for Iraq to come through with a new MOU for the coming year.

The April 28th crop progress report shows that we are still well ahead of the 5-year average in plantings and rice emergence, both up 14% and 11%, respectively. Louisiana is almost finished with 92% planted and 86% emerged, while Texas is just behind at 89% and 77%. Arkansas is 68/40, Mississippi is 62/31, Missouri is 44/11, and California is now at 20/0. Even though we are well ahead of previous years, the anticipated acreage reduction is looking to exceed 200,000 acres in the wake of poor prices and preventative planting. The cutoff date is May 25 for preventive planting in Northeast Arkansas, the most concentrated long-grain producing area in the U.S. Yield loss starts after May 10th, and right now, farmers are saying they need 14 days of dry weather to plant while rain is in the forecast for the days ahead. Estimates of a reduction in long-grain acres are in the 250,000 to 400,000 range.

With the harvest in South America wrapping up, the strong crop and adequate supply will pose a real threat to the U.S. crop being planted right now. While the domestic milled business, Iraq, and Haiti are crucial to the baseline health of the industry and on-farm pricing, so is the paddy export business to our partners in Mexico, Central, and South America. With ample quality supplies in the southern hemisphere to compete with, we do have concerns about pricing when we get to harvest and begin marketing the new crop.

In Asia, prices continue to bounce along the bottom as they have for the past four weeks. There appears to be no shortage anywhere, and even large demand centers like Indonesia are reporting that they won’t be needing as much rice as in the past. Asian prices are nominally quoted at $ 400 pmt, which is nearly a 20% reduction from a year ago. The weekly USDA Export Sales Report shows net sales of 12,700 MT this week, down 74% from the previous week and 62% from the prior 4-week average. Exports of 20,100 MT--a marketing-year low--were down 75% from the previous week and 70% from the prior 4-week average.

The next USDA Export Sales Report will be released on Thursday, May 8, 2025