by The Rice Advocate, US Rice Producers Associatio
The rice industry has had another lackluster week with the general decline that has plagued the trade for the past weeks continuing in most areas. Asian pricing has eased slowly but consistently over the past weeks. Initially, currency fluctuations were considered to be the culprit, however at this point that case is growing ever harder to justify. Supply and demand factors (specifically more of the former and less of the latter) appear to be in firmer control and the concern over availability in the Southeast Asian sphere seems to have abated for the time being. Similarly, the weekly world market price issued by USDA has declined again, largely attributable to the reduction in global pricing. With the increasing probability of large carryout stocks for the year, the probability for even lower WMP’s becomes much higher. Export sales were posted higher for the second week in a row as the market reaches for the apex of the cycle. Buyers are filling order against spot demand at this point and it is difficult to be certain that the current pace of export sales can be maintained. Consistent sales at or near the current levels would be a very welcome event nevertheless. Vessel loadings have kept pace against old sales rather closely, reinforcing the perception that the hand-to-mouth buying is the status quo. Domestically, cash pricing backed off somewhat as well, with stagnation and uncertainty plaguing the market. Buyers are in the market at low prices, but the current price levels have trimmed all of the fat out of the margins. Producers looking to maintain profitability are having a difficult time giving existing pricing more than a passing thought. The brighter side to the market was on the futures board, where open contracts have posted a week of very solid gains. Most of the futures market at this point is weather driven due to the tragedy unfolding along the Gulf Coast. Regardless, after months of steady decline any consistent uptick in price is welcome news.
On the production front, the deluge of the past ten days has continued despite some weather projections to the contrary. Louisiana has been the hardest hit among the rice producing states, with reports of water encroaching into the bins in some areas. Unharvested first crop in Louisiana and Texas is deteriorating rapidly with sprouting becoming a more widespread problem. Similar reports of sprouting have been noted in Arkansas. Row crop production is also suffering from the weather. Cotton that was defoliated and ready to pick has lost tremendous weight and seed quality. Soybeans that were set to make record yields in many areas have also begun to mildew and suffer quality concerns. The best hope for now is that the clouds part and allow for some drying weather to set in such that growers can salvage what remains of an otherwise difficult crop year to manage.