While the cleaning up and repairs from the devastation of Hurricane Laura continues, progress is still being made which will enable rough rice and milled rice vessel loadings in October. The bulk terminal experienced minimum damage and is expected to be operational for the first half of October. The first of two vessels (30,000 tons each) of rough rice sold to Brazil are scheduled for October. The second one in November.
Milled rice for a USDA tender is currently in the bagged warehouse ready to load as that facility reported no damage. Much of the delay was due to the cleaning of excessive debris in the ship channel itself to allow vessel movement into the port.
Congratulations to Louisiana Governor John Bel Edwards and state officials with this important effort to keep the food supply chain moving.
It continues to be an interesting time in the rice industry as the weather won’t cooperate and the market won’t either. Conflicting reports continue to be issued in the aftermath of the recent hurricanes that have impacted the Northern Gulf Coast and the extent of the damage will probably not be completely known for several weeks. Southwest Louisiana seems to have gotten a large part of their infrastructure put back together but the newest weather installment that is currently impacting Alabama and parts of Mississippi has yet to be analyzed.
In the export market, Asian pricing has pulled back ever so slightly among the benchmark origins, with minimal changes in the underlying currency values. This leads the market to speculate that the supply/demand matrix in that part of the world is not as tight as has been seen over the past week or two. Export sales have surged over last week’s volume and is getting close to levels seen several weeks ago. Vessel loadings are reporting similar numbers and increases which underscores the belief that buyers are working against short term inventory needs in anticipation of falling cash prices closer to the harvest in the Upper Delta.
USDA held its world market price estimate unchanged for the week. Domestically, the Texas and Louisiana first crop harvest has drawn to a close. Milling yields are lower than optimal, especially given the favorable conditions of the growing season. Mississippi and Southeast Arkansas are getting harvest underway and preliminary reports indicate that quality is holding up in that area at acceptable levels. The Upper Delta is in the early stages of harvest and no significant data has been reported at this time. The futures market for the week reported net losses for the open contracts on the board, largely a result of external forces in the soybean/corn/wheat futures complex. Daily volume and open interest both closed the week at higher levels than the previous report.
Last Friday, USDA released its September WASDE report with a few surprises for rice. On the supply side of the balance sheet, all rice beginning stocks were lowered while production, imports, and domestic use were increased. On the demand side, exports were increased by 1.6 million which was not enough to offset the supply side adjustments. The net result was an ending stock increase of 1.6 million hundredweights and a decrease in season-average farm price by $0.10.