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Is the rice market really that simple?

By Milo Hamilton
Market Advisor
USRPA
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Everyday I read commentary on the rice market, here and in Asia. And everyday, I hear of folks who think the rice market is simple and obvious and they know exactly what to do with it for you. The majority of those who think they are genuine market hedgers want to locate someone out there somewhere to tell them exactly what to do and when. Or else they plop their rice in someone else’s charge and say, “You do it for me. I have lost too much money and time trying to do it on my own.”

The first rule of investing or hedging is to not lose money. The second rule is like unto the first: Do not forget the first rule. For the last three decades, folks have employed me for one reason only: to make them money on their rice transactions. No money made for you, and I have no business for me. Now that is simple, no? Advice that makes you money is not a fixed expense; it is a wealth-building asset.

My track record is these questions: Who was bullish in the fall of 2002 and 2003, bearish in May 2004, bullish in the fall of 2005? Who was bullish through the GMO fiasco in September 2006? Who was super bullish in the fall of 2007? Who was super, super bearish in October 2008? Who was bullish in August 2009? Who is bullish now? They say it is not bragging if it is true.

Dead on or dead wrong?
Would you want an advisor who has been dead on or dead wrong since 2003? I would want a dead on type of guy, and that is why I am in business: to keep others in business.

The problem is that the vast majority of farmers think they know what a good market analyst is. He is someone who always knows for sure what you should do next with your wallet on his behalf. Such thinking is a huge and costly mistake, especially if you are getting the advice nearly for free. For free can become very costly.

I find the rice market is not easy to calibrate or navigate, and I do not make it too easy on others. I like to challenge people to make their own decisions, not mine. I was told when I started my rice advisory business that farmers would not pay anything for advice and that they all want to be told what to do and when. I think that is generally the case but not so for all farmers.

The railroad crossings used to say, “Stop, look and listen.” Railroad tracks are obvious enough, and freight trains are easy to hear and see but enough folks keep getting run over by them in their cars. You could say I am in the rice market signpost business. But everything is changing so fast that it is takes more than a GPS on your combine or signposts to stay out of pricing trouble. If you think the rice price is getting easy to understand then you probably will not finish this article.

I find it very difficult to understand the rice price. Sometimes it is clouded over, and I find it even more difficult to communicate my findings. You will go further on your journey to net worth if you find a way to know what you are looking for as you travel rather than just being told what to do and when before you set out. Rice marketing is not really a goal, rather it is a manner of travelling. If you want to know more about the world rice market, just call me or email me anytime.

Background information
Milo Hamilton is President and Co-Founder of Firstgrain, Inc., which since 2000 has published a newsletter titled The Rice Market Strategist.
CEOs and leaders throughout the rice world read this weekly newsletter. For 18 years, Mr. Hamilton managed millions of dollars of price risk for one of the largest global rice brands.

His motto is this: “The precious things are not pearls or jade but the five grains, of which rice is first.” He puts rice first everyday and relates everything to the rice market for his many clients.

Contact Milo Hamilton at milo@firstgrain.com or (512) 345-0497. For more about USRPA, visit www.usriceproducers.com.

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