Weather Trends Influence Markets, Uncertainty For 2024
KATY, TEXAS
This week, the U.S. rice market continued to churn through its steady domestic business and work on the problem of the low draft of the Mississippi River. This continues to affect most aspects of the agricultural trade but is putting a particular damper on total exports because products simply can’t move down the river at the anticipated rate. Haiti and Iraq are the two primary destinations for milled rice at the moment, and it will be nice to be able to fill a barge to the brim once again after the appropriate rainfall. As of this writing the river continues to hamper some barge loading positions while the majority are operating fine. Cape Girardeau, Missouri is the barge site furthermost north used for rice.
Directly south of us in the Western Hemisphere, Brazil and Argentina are making waves. First in the international spotlight is the new Argentine President, Javier Milei, who is determined to make the U.S. Dollar the currency of Argentina. He is not taking a surgical approach, but more of a blunt-force one. While his ultimate goal is to bring stability to the wildly volatile Argentine economy, he is wreaking short-term havoc on government departments, officials, and public works. Brazil’s news is more isolated to the rice industry, and their reported shortage leaves no room for speculation. The government has officially recognized the two Thai vessels that have recently been unloaded to bolster short supply. This sends far-reaching implications to export markets that are now available to U.S. exporters, as this cripples Brazil’s ability to compete at previous levels. Harvest in the Southern Hemisphere arrives in March, and it’s important to take advantage of the current window of opportunity.Adverse weather conditions continue to impact the Mercosur crop and many are estimating lower field yields than previously anticipated. Prices remain extremely firm.
The most recentFAO Rice Price Updateshows an index that averaged 138.9 points in November, which is the first time it hasn’t moved this year. The stagnation is a good sign for global rice prices but remains at 21.2% over the same time last year. This is the result of the global marketplace finally coming to terms with how to procure rice without India, with Vietnam appearing to be the big winner. The report states that Vietnamese prices have risen to their highest nominal level since July 2008. Japonica and medium grain varieties dropped 2% each this month, with Glutinous prices dropping 6.9%.
In Asia, Viet prices evened out from last week’s $660 pmt price and may be showing signs of tempering. Thai prices simply rose again in an attempt to catch up to Vietnam, with this week’s prices at $655 pmt. We can compare the FAO Rice Price Index growth of 21.2% year over year to Thai prices, which have increased a whopping 44%, and Viet prices which have popped 45%.
Theweekly USDA Export Sales reportshows net sales of 121,100 MT this week, down 6% from the previous week and 1% from the prior 4-week average. Increases were primarily for Japan (40,000 MT), Mexico (27,900 MT), Nicaragua (25,000 MT), Canada (8,600 MT), and El Salvador (8,000 MT). Exports of 54,000 MT were down 40% from the previous week and 2% from the prior 4-week average. The destinations were primarily Japan (26,600 MT), Haiti (15,100 MT), Mexico (6,600 MT), Jordan (2,200 MT), and Canada (1,900 MT). ∆
US RICE PRODUCERS