The global markets are in a unique position because of the homogenous pricing from nearly all origins in Asia and the Middle East.  Only six months ago, nearly $150 pmt separated Viet and Indian rice, where today, Indian, Viet, Thai, and other smaller origins are all quoting rice between $385-$400 pmt.  While one would think this would generate a buying frenzy on account of low prices, it simply cannot happen because of the container and vessel shortage that thwarts any shipping efficiency.  The only bright spot, which in itself is confusing, is India’s ability to continue shipping at rates that indicate they are unaffected by the pandemic-ridden freight debacle.  The Vietnamese government is considering curbing areas under rice cultivation because prices are so low. An exact amount has not been provided, but government officials have stated it could be as much as 5% by 2030—or 8.6 million acres.

The US industry is celebrating—both in posterity and for functional economic reasons—a 37,800 MT sale to Haiti.  While this sale is “overdue” and “to-be-expected,” it feels like a victory and is a positive step for a crippled government that is working to regain its footing.  Mills are also busy with the Iraq business, which creates a good balance of liquidating old crop as new crop arrives. With the significant amount of carryover weighing on new crop pricing, more export business will have to be generated to push prices any higher at this point.  Of course, rice is more expensive in the Western hemisphere than the Eastern hemisphere, and the low Asian prices weigh on the ability to generate the needed milled business.  The expectation, however, is that Asian pricing will rise with container and shipping availability.

On the ground, harvest in Texas and Louisiana is progressing well.  In TX, bids for new crop rice are settling around $14.00/cwt, and yield reports are coming in as expected.  In LA, however, we are hearing fluctuations in the yield with the USDA reporting 55% of harvest now complete.  That leaves plenty of rice yet to be cut to even and determine actual yield averages, where prices are reported at about $13.50/cwt for 55/70.  Still, no harvest updates to post for  Mississippi or for Arkansas, but there remains optimism in what looks like a good crop as the industry eagerly awaits the initial harvest reports.  The South Louisiana Rail Facility based in Lacassine, La has 100,000 tons of new crop rough rice booked for export.  The SLRF expects to ship a total of 200,000 tons this season.  Prices in Mississippi, Missouri, and Arkansas are all reported somewhere between $14.50-$15/cwt CIF NOLA.  In CA, the earliest fields look to be ready just after Labor Day weekend, and the crop is reported 100% as good to excellent.

The USDA’s weekly net export sales show long-grain paddy sales at 43,300 net tons, all to Central and South America.  Long Grain milled had small amounts to the UK, Saudi Arabia, and Canada.  Exports for the week tallied 92,100 metric tons.  The bulk was long-grain paddy sales to Central and South America and an additional 10,200 metric tons to the UK.  Long Grain milled registered at 25,400 tons, with Haiti taking all but 2,800 tons.  There were 20,100 tons of medium grain exports, the majority of which went to Japan at 15,800 tons.

In futures, the high over the past week was $13.63, and the low registered at $13.28.  Average daily volume registered at 1,289, with Open Interest at 7,776.

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