Things are beginning to liven up in the rice market in the aftermath of the recent hurricanes and the uncertainty that continues to surround the US rice crop production. 

In the international market, export sales were notably lower this week than in the prior report. Consistent sales are still difficult given the limited supply available and smaller weekly tonnages can be expected over the next several weeks. Vessel loadings were also decreased for much the same reasons. Asian benchmark pricing has escalated over the week, with all of the origins posting modest gains. Global supply and demand factors seem to be the driving force behind the changes at this time. Currency exchange rates also played a role in the changing values. USDA raised its world market price estimate for the week for both classes as well. 
In the domestic market, the damage from recent weather events is still being assessed. It is widely accepted that damage has occurred to the 2020 rice crop in most of the production areas, however, the size and scope has yet to be determined. Cash prices have firmed somewhat as a result in most areas. Quality and milling yields are still big question marks to be determined that will drive the pricing equation for the remainder of the year. 

The futures market this week has continued to surge, with all open contracts on the board closing higher. Gains ranged from 0.68% – 1.4% for the open contracts, while the largest gains were made in the deferred contract months. Both volume and open interest were lower than the week prior. 

In other news, the September supply and demand report will be released in the next few days which should provide some bullish news for rice. Given the production-related events that have occurred since the August installment, some yield adjustment can be expected, and the resultant transposition through the balance sheet should impact prices. 

Also, reports from South America suggest that the supply situation in that region is getting tighter. Buyers from the Mercosur area have already made overtures to purchase US rough rice at harvest to offset these deficiencies. Any sale of consequence to those destinations would boost the demand side of the balance sheet and help to firm up prices even further.  
Note: As previously mentioned in the Rice Advocate with regards to Brazil’s rice shortage, yesterday the Brazilian government made it formal with the announcement of a duty-free access of up to 400,000 tons of rice of any origin. Two U.S. vessels have been confirmed and others are being negotiated. Also, rice imports from Guyana and India reported were confirmed. With the Brazilian state of Santa Catarina beginning harvest in December and a full harvest in Mercosur expected in January and beyond, the needs of the country should normalize by the end of the year. 

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