With harvest complete, all focus has turned to selling this year’s augmented crop. The frenzy of the Brazil business has now subsided, and traders are now looking to the Iraq Grain Board for a tender announcement. While paddy exports still remain behind schedule, the pent-up demand to Mexico is finally coming to bear which should help move the market along. The milled business to Haiti has been on schedule but won’t be enough to compensate for the slower domestic demand on account of school, restaurant, and travel restrictions throughout the country because of Covid. The outlook remains positive, but that could change if we don’t see business materialize to Iraq in the near term.

In Asia, Vietnam continues to be pounded by terrible flooding, significantly impacting their ability to export. This has resulted in increased pricing from the origin, further distorting the price difference from Thailand. Available supplies in Vietnam have thinned at a time when millions of people in central Vietnam have been affected by these floods and landslides. India continues to work through the covid-caused logistical issues, offering the lowest prices, and supplying the majority of African demand.

Export sales saw a major boost this week with net sales reaching 121,500 MT. Most of this activity is attributed to Haiti where demand had been slow, but fortunately is now picking up. Japan is the other cause for the spike in sales, as this destination moves thru its tender season. The robust demand to Central American will likely be sustained throughout the marketing year, as this region’s other favorite origin, Brazil will be unable to compete against US rice in 2020/21 and possibly even 2021/22. This is perhaps most clearly seen in the year-to-date demand in Costa Rica which is nearly twice what it was at this time last year.

Growers continue to look for price discovery in the cash market, but bids remain scarce as buyers struggle to determine the market direction in the immediate future. There has been little to no movement since harvest by way of cash prices.

Futures have reflected a similar trend with open interest right in line with the 3-month average and the November contract basically flat since the beginning of August. They appear poised to make a move, and we expect to see more price discovery take place in the weeks ahead as traders convert export sales to shipments.