Rice Market Update: Gulf States Sold Out, Delta Price Boost
By Dwight Roberts, U.S. Rice Producers Association
The rice market has become much more interesting over the past week with more developments and movements in the last 6 days than there has been in the past 6 months.
This week’s export sales report was reported down as compared to last week’s report with a modest 29,200 MT sold. This number should increase over the next few reports as the overseas markets begin to source more rice and the competition for rice in first hands becomes more intense. Vessel loadings were dramatically decreased from the previous report as well.
Asian benchmark pricing has continued to escalate over the past week with all of the notable origins posting positive pricing. Some of these indicators have increased in the double digit range.
Fundamental supply and demand factors are at play in that sphere and with the bullish trend that has emerged, it can be expected that these numbers will grow in the weeks ahead. USDA has held its world market price estimate constant since the previous report. Next week’s installment can reasonably be expected to note some increases in that number as well given the upward movement in all of the market areas.
Domestically, there has been a flurry of activity in the past week with significant portions of the inventory being sold after the market overcame its impasse and escalated by several dollars per hundredweight in most areas.
The Gulf states are all but out of rice and a virtual bidding war has broken out amongst buyers in order to secure the remaining lots and cover medium term commitments. The Delta region has also experienced a boost in pricing and regardless of quality, can be expected to note larger sales volumes in the near future.
These trends have been reflected in the futures market with all of the open contracts on the board posting positive gains, even as the January 2020 contract exited the board in lieu of the new nearby March 2020 contract.
This week saw net gains ranging from 0.25% – 0.89% on high open interest. Daily volume was off ever so slightly from the week prior. Last Friday saw the release of the first WASDE report of the decade. Lackluster as ever, the report was still fundamentally bullish.