All grain prices, including rice, point
to a strong market
| By Gene Johnson|
The U.S. rice market continues on a bullish trend line, as are all the grains. The overall short supply/demand ratio for rice globally is really driving prices. Total exports so far this marketing year lead last year’s pace by 28 percent.
The surge in exports occurred because a tremendous amount of forward buying was made by astute offshore buyers, who read this market correctly. It also points to how fundamentally strong the market truly is.
The mills are quite busy through February and into March, primarily on old sales to Haiti and West Africa. Also, Iraq has floated a fresh tender for 30,000 metric tons (mt) closing Jan. 27th. They may well buy more than the 30,000 mt as their demand is much deeper than that.
Most paddy rice bids fall on deaf ears
In south Louisiana, bids for long grain were raised by $1/barrel to $21/barrel ($12.96/cwt) for basis No. 2/62/70 FOB farm with shipment within four weeks. Light sales were reported. In Texas, bidding for long grain continued at $6.25 over loan price for package-quality rice and $6.00 over loan for other types, with no selling being reported.
In Delta areas, high bids for long grain were reported at $5.60/bushel ($12.44/cwt) FOB farm basis No. 2/55/70 for quick shipment. A few sales were reported.
Many indicate that Delta farmers have gone strongly for wheat, which is expected to be followed by soybeans. There is also a strong interest in milo instead of corn. The high cost of nitrogen may shift additional acres out of rice and corn in the Delta.
Long-grain carryover projected to drop
The long-grain market continues strong, with export sales running well ahead of usual, pointing to a minimum carryover for long grain at the end of the market year. The increasing supplies that are now being harvested in Asia may slow or stop market increases for awhile. However, with unsold supplies very low and a long wait for the new crop harvest, there is likely more upside market potential.
Gene Johnson is a professor of agricultural economics and agribusiness
with LSU AgCenter.