Cash Market Update:

In the South, the cash market has traded mostly sideways for the past several weeks. There is just enough trading taking place that the market is remaining relatively steady. Ultimately, there will have to be a change in the export picture before the market establishes further direction.  As mentioned in previous reports, the robust demand to Brazil has been more than offset by a lag in Mexico and Haiti.  Although demand to these destinations is expected to grow, it has yet to really materialize which has certainly been a stagnating factor.


The November certified acre data appears to be included in this month’s WASDE. The report shows decreased acreage that led the USDA to slightly lower their production estimates for the 2020/21 crop, albeit by a negligible amount. The November FSA report cited certified planted long grain acres to be 2.299 million.  Roughly 324,000 acres were catalogued in the prevented planting column and another 19,000 acres in the failed column.  As known for some time, southern medium grain acres were down significantly against last year with the current data pegging acreage at 179,000, with about 12,000 as failed acres. 

Overall, the total long grain supply was unchanged as the agency added imports to offset the decline in output.  While domestic use was left untouched, exports were lowered by 2 million cwts which ultimately left the carry out with an additional 2 million cwts of supply.  Despite the stocks increase, the season average farm price was revised upward by $0.20 per cwt to $11.70. 

Turning to US medium & short grain, production edged lower but was also offset by a bump in imports. Since demand for both domestic and export projections held constant this month, so did ending stocks at 12.3 million cwts.  The season average farm price for California is still forecast at $18.80 per cwt, while southern medium grain was given an additional $0.20 per cwt ($11.80 per cwt). 

At the global level, 2020/21 is expected to bring higher supplies, lower consumption, minimal change to trade, and increased stocks

In Asia, Thai prices are expected to come under pressure with main-crop supplies entering the market, however, the market has demonstrated a surprising resilience with prices currently up $20 per ton from a few weeks ago.  After undergoing a sharp decline in exports in 2019/20 on low supplies, exports from this origin look poised to bounce back in 2020/21. From Jan-Sep (2020) so far this year, rice exports have reached only 4 million metric tons, which is 32% less year over year.  Thailand is projected to export an additional 1.8 million metric tons by year end.  Thai rice has been $40-50/metric ton lower than Vietnamese rice, and $135/metric ton higher than Indian rice this year.

In Brazil, despite the abject shortage this year that prompted three paddy vessels from the US, Conab has revised their paddy production estimates slightly, from 10.9 million metric ton to 11 million metric ton.  Consumer inflation in Brazil has been increasing since the summer and is exacerbated by food prices that have been bumping as well. While Brazil is no stranger to a volatile currency, the combination of COVID and strong exports to China have forced more consumers to eat staples at home that are now scarce because of a strong export market for those same staples.  For example, 5kg of rice in December of 2019 cost a consumer $12.41 R$.  The same 5kg of rice in September 2020 now costs $20.35 R$, an increase of 64%.  Staples have increased more than other packaged foods, but this highlights the problem that some countries are facing in response to the global pandemic