Volume 18, Issue 06
February 12, 2021
In This Issue:
  • Market Update: Biggest Competition for Rice?
  • Washington DC Update
Market Update: Biggest Competition for Rice? Corn & Soybeans in 2021
Cash Market:
The market in Texas remains firm and steady on supply scarcity. Growers in both Texas and Louisiana are already looking to new crop as the two states begin to prepare for planting season. This year’s spot market prices have proven extremely steady across the board, but especially so for Texas and Louisiana. Historically, prices can vary by $1-2 per cwt between harvest and mid-February, but this year prices have stayed within roughly a $0.50 per cwt range. This is expected to result in steady acres in the lower gulf, while further up the river, rice acres will be forced to contend with corn acres as the corn prices continue to climb, as well as grain sorghum and soybeans. Some report that rice acres in Arkansas will be down 20% from 2020.
 
WASDE:
According to the USDA, the 2020/21 global outlook is for larger supplies, stronger demand and growth in terms of trade. Ultimately all of these factors are expected to result in lower stocks. The 2.2 million tons of additional rice demand is courtesy of rising domestic corn prices in China, where the country intends to utilize more of its old-crop rice as a substitute for corn.

In the US, the long grain balance sheet revisions were dismal as there was nothing new to report on the supply side of the equation and only minimal tuning to the demand side. Domestic use was left unchanged at 125 million cwts, which is up 17% from last year. Export demand was lowered 1 million cwt which bumped ending stocks by the same amount, now projected at
27.3 million cwts. The most positive change was the improved season average farm projection which is now $12.20 per cwt. The story was even less remarkable for US medium and short-grain where there were virtually no changes made to the balance sheet. As it pertains to the South, USDA anticipates slightly better farm prices from a month earlier.
 
Exports
Net sales were down for the third week in a row as demand in Central and South American seems to be pulling back. Conversely, loads were up significantly from the previous week as exporters work to ship against outstanding sales. Overall, total long-grain export demand is down just over 18% from last year. According to current numbers, the US has marketed 35% of the crop through December versus 47% for the same timeframe the previous year.
 
Affected by drought much of the growing season, the harvest in the Mercosur region of South America is mostly underway in Paraguay. Heavy rains have fallen in that country during the last two weeks, too late for planted acreage and delaying harvest. The most anticipated, is the harvest about to start in the key Brazilian state of Rio Grando do Sul that produces close to 75% of the entire country’s rice. Early field yields will give us an indication as to Brazil’s import needs later in the year, particularly as we get into March.

Iraq purchased 60,000 tons of Uruguayan rice through the recent tender. Also, it is reported that Argentina has sold 30,000 tons of milled rice (15% brokens) to Cuba at an FOB price of $530/ton.
 
In Asia, India continues to benefit from robust export demand which has driven prices up to near 3-year highs at $408 per ton. While Thailand saw a small uptick in pricing, Vietnam held steady as both markets look to the Lunar New Year.
 
The nearby futures contract closed at $12.89 per cwt, down 13 ½ cents from the previous week. Meanwhile, average volume was 16% and open interest relatively steady.
Rice Outlook
Nathan W. Childs, Coordinator
India’s 2021 Rice Export Forecast Raised to a Record 15.0 Million Tons
Destined for Mexico, Louisiana rice farmers load rough rice in railcars at the South Louisiana Rail Facility in Lacassine, Lousiana this week. 

Rice farmers in Southwest Louisiana and East Texas are focused on spring planting as they have virtually no unsold rice in their bins.
Washington Update
There was much activity this week on the House side. The House Agriculture Committee’s Democratic Caucus organizational meeting was held and Chairman David Scott of Georgia announced the election of the Chairs of the Committee’s six Subcommittees as follows:

  • Jim Costa of California will Chair the Subcommittee on Livestock and Foreign Agriculture
  • Abigail Spanberger of Virginia will Chair the Subcommittee on Conservation and Forestry
  • Jahana Hayes of Connecticut will Chair the Subcommittee on Nutrition, Oversight and Department Operations
  • Antonio Delgado of New York will Chair the Subcommittee on Commodity Exchanges, Energy, and Credit
  • Cheri Bustos of Illinois will Chair the Subcommittee on General Farm Commodities and Risk Management
  • Stacey Plaskett of the Virgin Islands will Chair the Subcommittee on Biotechnology, Horticulture, and Research
  • The House Agriculture Committee’s Republican Leader Glenn “GT” Thompson (PA-15) had announced the subcommittee Ranking Members for the 117th Congress earlier and they are as follows:
  • Rep. Austin Scott of Georgia will serve as Ranking Member of the Subcommittee on General Farm Commodities and Risk Management.
  • Rep. Michelle Fischbach of Minnesota will serve as Ranking Member of the Subcommittee on Commodity Exchanges, Energy, and Credit.
  • Rep. Doug LaMalfa of California will serve as Ranking Member of the Subcommittee on Conservation and Forestry.
  • Rep. Don Bacon of Nebraska will serve as Ranking Member of the Subcommittee on Nutrition, Oversight, and Department Operations.
  • Rep. Dr. Jim Baird of Indiana will serve as Ranking Member of the Subcommittee on Biotechnology, Horticulture, and Research.
  • Rep. Dusty Johnson of South Dakota will serve as Ranking Member of the Subcommittee on Livestock and Foreign Agriculture.

On Wednesday, February 11, 2021, the House Agriculture Committee met to organize and adopt rules for the new Congress. Also on the agenda was the consideration of the Agriculture and Nutrition Title pursuant to the reconciliation instructions provided in the Fiscal Year 2021 Budget Resolution, S. Con. Res. 5. The proposal which Chairman Scott had unveiled earlier would cost $16.1 billion, and was quickly criticized by Republican Ranking Member Glenn Thompson for both the policy and the manner in which it was developed with no input from Republicans.

After consideration of amendments, the bill was adopted on a party-line vote. The only amendment adopted in a bi-partisan vote was one offered by Republican Randy Feenstra (R-IA) who authored an amendment that would extend WHIP+ to 2020 crop year and make derechos and high wind losses eligible. Cindy Axne, a Democrat from Iowa, joined Republicans to address the disaster which greatly affected Iowa producers.

The proposal will be part of the $1.9 trillion coronavirus relief bill which will be assembled by the House Budget Committee. The reconciliation proposal also contains $4.0 billion for food supply chain and agriculture pandemic response, $1 billion for nutrition assistance in Puerto Rico, American Samoa, and the Northern Mariana Islands, and $1 billion to improve land access, address heirship issues and provide legal assistance to socially disadvantaged farmers and ranchers. $800 million for Food for Peace, $1.15 billion for State’s SNAP administrative costs, and $500 million for emergency grants for rural health care.

A much-discussed provision during Committee consideration was a provision providing a payment equal to 120 percent of the outstanding indebtedness of each socially disadvantaged farmer and rancher on loans made directly by USDA or made by a private lender with a USDA loan guarantee.
Upcoming Events
February 10, 2021 (on-going)
Virtual NCS Cotton & Rice Conference

February 18-19, 2021
97th Agricultural Outlook Forum!

February 23, 2021
MRRMC Annual Meeting in Dexter, Missouri
Details Coming Soon
Cornerstone
Trade Update 
Food & Ag Regulatory
and Policy Update 
Cornerstone
Trade Update 
2020 rice production estimate remains unchanged at 3.5 MMT, with projected 1.7% increase in demand. Prices increased in late 2020 and early 2021 due to lower overall production in 2020, increasing pressure on the government to release rice stocks and increase imports.
Monthly report on crop acreage, yield and production in major countries worldwide. Sources include reporting from FAS’s worldwide offices, official statistics of foreign governments, and analysis of economic data and satellite imagery. The report reflects official USDA estimates released in the monthly World Agricultural Supply and Demand Estimates (WASDE).
This monthly report includes data on U.S. and global trade, production, consumption and stocks, as well as analysis of developments affecting world trade in grains. Covers wheat, rice and coarse grains (corn, barley, sorghum, oats and rye).
H. Rouse Caffey Rice Research Station News
Big Changes in
Louisiana Rice Varieties
On-Tap for 2021




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