Market Update - USDA Report: Rice Stocks Down 10%, Support Higher Paddy Prices

July 1, 2022

The market continues to plod along, but this week with a shot in the arm from the USDA planted acres and rice stocks reports. As all expected, acres were down from last year, registering in this report total drop of 189,000 acres, split 70,000 acres of long grain and 106,000 acres of medium grain. This is perhaps less than some were expecting, so at this point we will keep an eye on weather to determine how much of the planted crop makes it to a healthy harvest. To that point, higher than normal temperatures in Texas are stressing the rice crop already, causing crop experts to warn of lower yields. The triple digit temps on the backs of a drought are not boding well for a strong crop at this point.

The Stocks report paints a decent picture — one that helps support the higher paddy prices that have been sustained on the ground. Total rice stocks were reported down 10% from this time last year; long grain rough down 11%, long grain milled down 5.5%. Crop Progress is right on track, except in California where cool weather during planting has all but stunted the rice plants, slowing their growth to maturity.  And while Texas is experiencing dangerously high temps, cooler weather patterns in Arkansas and Louisiana bode well for harvest.

recent GAIN report on Mexico published this week shows an increase in expected production in the region, up to 291,000 MT (rough), which is up 6.2% or 17,000 MT over USDA’s original estimate of 274,000 MT. This equates to approximately 200,000 MT of milled rice, correspondingly up from the 188,000 MT estimate. The increase is a result of increased plantings, and a higher yield projection, however local sources temper this expectation with concerns about water availability in Campeche to finish the crop.

In Asia, Thai prices dropped again, down to $410 pmt from $420 pmt las week. This is coming much more in line with the prices from three months ago before Iraq stepped in and tightened supply up a bit. Vietnam held constant at $420 pmt, as did India at $350 pmt.

The weekly USDA Export Sales report shows net sales of 17,500 MT, down 13% from last week’s dismal report, and 45% from the prior 4-week average.  Exports of 45,800 MT were down 13% from the previous week and 25% from the prior 4-week average. The destinations were primarily to Haiti (15,100 MT), Japan (12,000 MT), Honduras (8,800 MT), Canada (3,400 MT), and South Korea (2,700 MT).

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