U.S. Rice Market Continues Firming Trend

US RICE PRODUCERS

KATY, TEXAS

This isn’t physics, but in this rice market it seems that for every action there is an equal and opposite reaction. A case in point is an enormous carryover, very nearly offset by the substantial acres we did not plant. Long grain stocks on August 1 stood at 38.2 million cwt, call it 500,000 acres sitting in the bin — and that is the wet blanket over any bid on new crop. Yet new crop itself is down roughly 700,000 acres from the ten-year average. The market thus far has priced in an even year despite the massive reduction, though between El Niño and the short crop, a firmness is building in sentiment. As one rice miller mentioned a couple of weeks ago, U.S. rice mills will be sweeping the floors looking for rice in 2027.

Last week we examined how El Niño is pressuring the Far East and Middle East rice complex, which we expect will translate into higher prices for us here in the West. One of our biggest obstacles, as an export-driven crop, remains the dollar, and specifically, where it is strong. The rupee has fallen to 95.70 from roughly 87.50 a year ago, an all-time low that hands India a standing discount on every ton it ships. Rising export prices do not necessarily put those dollars on the ground here.

In the field, the combines are ahead of schedule, and the crop behind them is slipping. Harvest across the six reporting states reached 27% by August 23, against 20% last week, 24% a year ago, and a five-year average of 21%. Louisiana is at 83% cut, Texas at 69%, while Arkansas has jumped to 16% from 7%. Rice Condition, however, eased for a second straight week to 68% (good to excellent from 70%, with Mississippi at 45% and Texas at 52% dragging the average down.   ∆

US RICE PRODUCERS