|
KATY, TEXAS
With so little old crop available in the spot market everywhere except Arkansas, cash bids for the new crop are beginning to surface. Grower expectations are north of $15/cwt at this stage in the game, or at least that’s what they are signaling is necessary to break anything loose. Milled exports are lagging significantly as a result of a saturated Haitian market that can’t distribute what they have,and continued financial problems with Iraq. U.S. long grain 5% is holding steady at $800 pmt, now some of the cheaper rice in the Western Hemisphere. Uruguay is right on par with us at $800 pmt, Argentina at $840 pmt, and Brazil, in utter chaos due to recent historical flooding and harvest losses is north of $850 pmt. Fresh supplies will be welcomed this year, as long as the logistics don’t degrade any further. Earlier this week the Brazilian government announced a 300,000-ton tender from any origin worldwide in an effort to maintain food security and price stability, especially to the lower-income segment of the economy. How it all plays out might very well be a different story. These issues are expected to receive considerable attention in Cancun, Mexico next week during theRice Market & Technology Convention. Read the full report regarding the Brazilian tender.
The strains on global shipping, while not making headlines at the moment, haven’t subsided either. It’s true that some of the initial problems are getting worked out, but delays and cost increases abound in both the Eastern and Western Hemispheres. Some from the industry note that the drought in the Panama Canal and the security problems off of Yemen are a “black swan” event for the shipping industry. In the east, the port of Algeciras in Spain and the Tanger Med port in Morocco are operating at max capacity to account for the loss of access to the Gulf of Aden. This port, due to the Houthi rebels, has seen a 90% reduction in container deliveries. Deliveries from Asia bound for Europe are adding at least 14 days to go around the Cape of Good Hope in South Africa, resulting in additional costs to all goods being delivered. While details of cost increases and delays could fill volumes, the bottom line is that volatility remains high, and will continue to be through 2024, even if you’re not reading it in the headlines.
The crop progress report offers more good news. With California having a huge week in and nearly catching its 5-year average, all states are now 96% planted, compared to a 5-year average of 91%. Arkansas is at 99% planted with 93% emerged. California is 80/25, Louisiana is 100/97, Mississippi is 95/79, Missouri is 96/90, and Texas is 100/95. It will now largely be up to water management and the weather in how the crop continues to progress, with the hope being for significantly higher quality long grain than last year. 15% of the crop is in Excellent condition, 65% in Good condition, 17% in Fair, and 3% in Poor/Very Poor.
In Asia, Thai prices softened about $15 pmt this week down to $630 pmt, while Viet prices held firm at $595 pmt. More news regarding the 10-year-old rice sale out of Thailand has come to the surface since last week, but we will keep you posted on developments here. The RMTC this coming week couldn’t be timed better given the market dynamics the rice industry is facing at this moment. The logistical issues in both hemispheres, along with the floods in Brazil make for a well-timed and relevant event for rice professionals to find solutions. ∆
US RICE PRODUCERS
|