Market Update: U.S. Spring Planting Underway Along Gulf Coast

March 22, 2024
The market is moving forward in a firm direction, albeit without any significant changes. The domestic millings are strong, making it difficult to even procure rice for new or export customers. We have been noting for weeks the coming harvest in South America and the increased competition, but the expectation of a shorter crop and the continued strong demand is putting a bit more strength in the futures market than initially expected. It will be interesting to see how it plays out once harvest is officially underway, but signals as of writing are that prices may not soften much. Harvest has begun in Uruguay, Argentina, Paraguay, and Brazil, but not in earnest or with enough results to provide any actionable intelligence at this point. Weather-related incidents throughout the growing season have resulted in a late maturing crop with inconsistent field yields reported.
Prices on the ground are strong too, when demand surfaces. It is getting more and more difficult to find available supplies in Texas, but prices are reported as high as $19/cwt right now. Louisiana is firm at $18.52/cwt. Mississippi, Arkansas, and Missouri are all at $18.00-$18.25/cwt. When taken together, the current cash price, the pace of exports, and a smaller crop in South America are making a strong case to plant rice this year. Our surveys indicate a little rice has already been put in the ground in Texas ahead of schedule, but that is the outlier. We are still expecting a crop that exceeds 3 million acres this year. A few fields along the Gulf Coast have been planted during the last days of February as usual to hopefully obtain a good ration crop yield.
In the global marketplace, Asian prices are officially softening, with Vietnam's dropping below $600 pmt for the first time in several months to $590 pmt. Thai prices remain above the $600 mark but have dropped down to $620 pmt this week. At first glance, this could be taken as a foreshadowing of the easing of the Indian export ban, but upon further inspection, the softening is more a result of new supplies becoming available. Indonesia will be coming to market for another sizable tender in the coming weeks, which is expected to buoy prices back up. The spread is once again widening in comparison to U.S. long grain, where prices have now reached $800 pmt for USA 5%. Reports of Thai bulk rice vessels headed to Mexico are rumored to be sold at $710 CIF Veracruz if not lower.
The weekly USDA export sales report shows net sales of 60,900 MT this week, up noticeably from the previous week, but down 27% from the prior 4-week average. Increases primarily for Mexico (21,400 MT), Haiti (15,300 MT), the Dominican Republic (12,200 MT), Venezuela (6,300 MT), and Canada (2,100 MT). Exports of 96,800 MT were up 6% from the previous week and 18% from the prior 4-week average. The destinations were primarily Mexico (28,200 MT), Venezuela (25,800 MT), Honduras (21,700 MT), Haiti (15,300 MT), and Canada (2,700 MT).
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