Market Update: Western Hemisphere Rough Rice Importers Focused on U.S. Harvest

October 13, 2023
Harvest marches on with strong progress this week across all rice states. Arkansas jumped to over 80% complete — nearly 10% ahead of last year and the 5-year average—while Louisiana, Mississippi, and Texas are all but complete. Missouri is on the back-half of their harvest, while the Californians have finally hit full-stride, registering at 20% complete as a state. There are minor weather events on the horizon, and a deluge of rain in some regions this week that caused a lot of rice to go down, but optimism reigns on the west coast for a solid harvest.

Last week we reported on high field yields and low milling yields in Arkansas… and the story is the same this week. Producers are ecstatic about what their yield monitors are displaying in the field, but we can state with moderate confidence that head rice is going to average about 50 lbs this year, perhaps a bit higher. With the large acreage and high yields, the bottle-neck for some regions in Arkansas and Mississippi could turn out being the waning flow of the mighty Mississippi. Low precipitation levels and low river flows are causing concern in the logistics chain; more to report here as the situation develops.

The cash and futures market has been slow to materialize this year. The expectation was that we would be further along in market direction this deep into harvest, but the whiplash from India’s export ban and ensuing market reaction has resulted in significant caution from buyers. This doesn’t mean they aren’t coming to market, but simply that they are covered for the moment and want more information before booking business or taking any sizable positions. We do know that U.S. prices are very competitive with South American prices, and exporters south of the border don’t have sizable supplies. Paddy sellers want and expect higher prices, but the confidence to sell a milled (or paddy) product on the export market is not there yet. Again, U.S. long grain is in the $755-$765pmt range, Uruguay at $745, Argentina $740, and Brazil $715. The tables have certainly turned when comparing this year to last year. Spring planting is well underway in Mercosur countries and a large crop is anticipated. The Paraguayan harvest will begin in January.

In Asia, we have seen a significant cooling with the panic all but gone, and perhaps now with enough perspective to process what this market might look like when India re-enters the market. It might be too early to talk about the nuts-and-bolts of this action, but we all know it’s coming. Remember the ban was instituted in September on the assumption the El Niño would severely reduce the crop size. Well, we are almost through the season and the numbers won’t lie. In any case, Vietnam has held firm in the $610 pmt range, Thailand at $595 pmt, and Pakistan in the $550 pmt range. Remember that before the ban, prices were hovering right around $500 pmt.

The weekly USDA Export Sales report shows net sales of 53,100 MT this week, up 89% from the previous week and 10% from the prior 4-week average. Notably, Nicaragua registered for 25,000 MT. Exports of 25,500 MT were down 45% from the previous week and 48% from the prior 4-week average.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram