Despite the market being eager for more price discovery, the cash market continued to trade sideways throughout most of the delta this week.  In Louisiana, growers wanting to participate in the Brazilian sales have now done so, removing some of the recent urgency and excitement in the market.  With the second vessel loading this week and ready to sail soon, there now seems to be very little buying interest. Fortunately, there is just enough interest in most U.S. paddy markets to hold prices steady, however, that can change if other export destinations become slower to engage. 

Trade with Mexico still lags substantially behind last year’s demand, currently down 45% year to date.  Brazil will be unable to source rice to Mexico in this marketing year, which frees up more market share for the U.S. unless Asian milled rice is able to infiltrate the market.  There has been considerable talk between U.S. exporters and importers in this particular market, so most expect to see something materialize in the near future.  As for the milled market, despite the Iraqi Grain Board being in talks with U.S. exporters to source at least 30,000 MT, there has yet to be any significant action on that front.  Last year at this time, this destination had already booked 150,000 MT.

In Asia, prices have steadily declined since August, with Vietnam being the only real exception.  Prices rallied slightly two weeks ago and held this week, which point to some stabilization in the short run. Although prices in these origins have edged lower, the FAO Food Price Index continues to trend upward.  World food prices are up 6% from last year and have reached their highest levels since 2020 on rising sugar, dairy, cereals, and vegetable oil prices.  The appreciating cereal prices are attributed to poor growing conditions in Argentina as well as drier conditions impeding winter wheat production in Europe, North America, and the Black Sea Region.

Ultimately, for the U.S. rice prices to improve, importers such as Haiti, Mexico, and Iraq need to ramp up their purchases, otherwise, the market could see further softening as the New Year approaches.  Futures activities support this theory as well, where the nearby contracts seem to be oscillating around $12.40 per cwt.