Sunday, September 19, 2021

Rice market update for the week ending Aug. 13, 2021

• By Scott Stiles •

Rice futures began the week higher with Monday’s crop progress indicating a slow start to harvest in Louisiana and Texas. Given that, the market kept a close eye on a tropical system heading into the Gulf of Mexico.

Likely the most anticipated news came on Thursday with U.S. Department of Agriculture releasing Export Sales, the August World Agriculture Supply and Demand Estimate and Crop Production, and Farm Service Agency’s first report on certified acres.

Focusing on the U.S. long-grain balance sheet, USDA made one adjustment to old crop (2020-21), lowering imports 1 million cwt. Also, the 2020-21 season-average farm price was increased $10 cents per cwt to $12.60 or $5.67 per bushel.

This would equate to a Price Loss Coverage payment for the 2020 crop of 63 cents per bushel. The table below includes the projected 2020 payment rates per bushel for long-grain and southern medium grain. Final 2020 marketing year average prices are expected to be announced Oct. 29.

PLC rates for riceTurning to the new crop long-grain balance sheet, USDA reduced total supply on downward revisions to beginning stocks, production, and imports. Beginning stocks were lower on the 1 million cwt reduction in old crop imports.

First survey-based production forecast

The first survey-based 2021-22 production forecast reduced long-grain production by 2.3 million cwt to 150 million, on lower yields. With no adjustments to harvested acres this month, the projected long-grain yield appears to be 7,352 pounds per acre (163.4 bushels per acre), down 110 pounds from the previous trendline forecast.

New crop imports were lowered 1.0 million cwt. to 30.0 million. Total supply was reduced 4.3 million cwt. from last month to 211.8 million.

Domestic and residual use was lowered by 2.0 million cwt to 118.0 million. Exports were increased by 2 million to 65.0 million cwt. on sales to Iraq for the first time in two years. Thus, no net change month-to-month in total usage at 183 million cwt.—which is the same as 20/21.

Projected 2021/22 ending stocks were reduced by 4.3 million cwt to 28.8 million, down 9.4 percent from last year. The 2021/22 season-average farm price was increased $0.10 per cwt to $12.90 or $5.81 per bushel. At $12.90, the average farm price would be the highest since 2013/14.

2021-22 long-grain supply and demand

2021 certified acres

Also on Thursday, USDA’s Farm Service Agency released its first 2021 report on certified crop acres. The tables below provide a state-by-state look at long-grain and medium grain acres certified as of August 1st. For comparison, the planted acres from NASS’ June Acreage survey are also included.

FSA long-grain certified acresWhen all is running smoothly at FSA county offices, the initial August report has generally accounted for 99% of final certified rice acres in Arkansas. With COVID-19 posing challenges last year, about 96% of the final acreage total was in FSA’s 2020 August report.

2021 medium grain certified acres

With the resurgence in COVID, data collection at county FSA offices is still a bit behind the “normal” pace. That may explain some of the noticeably wide differences between National Agricultural Statistics Service acreage and certified acres collected to date.

Nonetheless, let’s assume for instance that growers have in fact reported 96 to 99% of acres to FSA. If that’s the case, one could argue that Louisiana and Missouri’s long-grain acreage could fall well short of NASS’ June acreage.

The same might be said about California’s medium-grain acreage. These acreage disparities will be scrutinized by the rice market over the coming months. FSA will release its next update on certified acres Sept. 10.

Crop progress

In Monday’s crop progress, USDA estimated that 74% of the U.S. rice crop had reached heading, 1 percentage point ahead of last year but 6 points behind the five-year average. Arkansas’ crop was 67% headed as of Aug. 8, up from 49% the previous week.

2021 rice harvest progress

Nationally, 7% of rice has been harvested, two percentage points behind last year and 1 point behind average. No harvest was reported for Arkansas.

Harvest in the Deep South moved ahead with Louisiana at 33% complete as of Sunday, up from 13% last week. Texas’ harvest has been off to a slow start and was estimated at 25% complete, up from 7% the prior week.

Scott Stiles is a University of Arkansas Extension agricultural economist. He may be reached at sstiles@uaex.uada.edu.

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