Arkansas Rice Harvest 50% Cut
US RICE PRODUCERS
KATY, TEXAS
Harvest is moving across the Southern rice belt, though not without its bumps. Arkansas leads the way in volume now with 40–45% of the crop in the bins. Spotty rains have slowed harvest in some places; the bulk of the state remains dry. The bigger concern in Arkansas is milling; hot conditions have already taken a toll on out-turns, and the scattered showers are doing more damage to milling quality than the heat alone. It's early in the process as reports are generally inconsistent. Light trading was reported at $15.00 delivered. Mississippi continues to report a very small crop this year, with harvest expected to begin shortly, and the leftover old crop is proving to be more of a headache than a help. In South Louisiana, field numbers changed little week over week, but the mood is a touch more positive than at this time last year. Texas produced the most interesting numbers of the week. Riviana entered the public sales market strongly, pushing premiums from $4.35 to $6.40 over loan basis 55/70, with rice milling 60+ fetching $6.69 premiums. Unfortunately, half of the 30 lots offered milled below 50% and drew only $5.89–$6.10 premiums. Field yields have been solid on the hybrids at around 10,000 lbs dry, with conventional varieties closer to 6,500 lbs and jasmine types between 5,400–6,100 lbs, but milling 60+ on nearly everything seen.
South America is caught in the same slow trade we are experiencing here at home. We sense that when this market does turn, it will do so in a hurry. What matters for U.S. producers is that the South Americans remain our primary competition for every market that counts, and especially the two we have our eye on for new future business: Cuba and, to a lesser degree, Iran. Prices continue to push upward due to an expected smaller planting that has begun in some areas. Weather events, the result of El Niño, continue to be a concern and have forced some to cut back on spring planting. FOB paddy prices for Brazilian and Uruguayan rice range from $385-$400/ton FOB.
The world is slowly working off an excess of long grain, and the best estimate is that it will take somewhere between nine and eighteen months for those supplies to be consumed. The FAO Rice Price Update confirms what we have been reporting; we are finally moving off the bottom from a year ago. The All Rice Price Index averaged 109 points in August, up 0.5% from July and 7.4% above the same time last year. Most rice varieties were mixed in price action, but the Western Hemisphere got a callout, specifically US long grain—because of the uptick resulting from the short crop. All indications, even at a global level, are pointing to higher prices for the coming year.
A recent GAIN report on India reveals that El Niño is having its impact on the world’s largest rice exporter, but not to a severe degree. Post decreased the rice production forecast down to 147 MMT from 154 MMT; however, the record carryover stocks are offsetting this drop, much like what we’re seeing in the United States (but to a lesser degree). This means that while the market may feel a slight constriction in global stocks, it will likely not be enough to instigate any major volatility. What is not factored into these yields, however, is the impact of a lack of fertilizer on account of the Straight of Hormuz closure at key times. ∆
US RICE PRODUCERS