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Groundwork is progressing across all states, and this week’s Crop Progress report shows Louisiana is 80% planted and 65% emerged, Texas is 63% planted and 42% emerged, and Arkansas with a huge bump to 46% planted with 7% emerged. Last week reported Arkansas at only 13% planted, and the 5-year average for this time is 17%. The remaining states are Missouri with 35% planted with no rice emerged, Mississippi with 17% planted and 2% emerged, and California still working up the fields with no plantings to date. Overall, the industry is 44% planted, which is nearly double the pace of the 5-year average of 26%.
With a tight paddy supply and planting underway, the spot market is firm when rice can be found. But with the producers focused on planting, activity has been more than the last few weeks and is expected to continue in this fashion until planting is largely complete. Prices are reported at $16/cwt in Mississippi, Arkansas, and Missouri, $18.52/cwt in Louisiana, and $19/cwt in Texas. The milled market is steady but could use another tender from Iraq. The good news is the banking problems have caught the attention of the necessary parties in Washington, we are monitoring the situation and expectant for a solution to resume trade.
The window between the old crop and the 2024 harvest is reflected in current paddy export prices which are the highest in recent years. Low milling yields resulted in the churning through of higher volumes by U.S. mills to obtain the whole grains and last fall the U.S. was the only source of paddy in the hemisphere, a market condition that had never been seen as Mercosur supplies were too tight. Once farmers finish spring planting, the final stocks still in the bins will be sold, making room for new crops.
With the 2024 Brazilian & South American harvest underway, many buyers expected lower prices and an ample supply, but that is just not happening. Blamed on excessive rains and adverse weather conditions, the harvest is very late maturing and field yields are coming in lower than anticipated. The result is another first, like currently in the U.S., Mercosur exporters are lacking competitive FOB prices as well and are largely out of the market. Uncertainty in the marketplace is a constant theme at the moment.
We mentioned the emerging issue in Costa Rica last week, and a GAIN report was just published this week and outlines potentially optimistic news that may be able to help supplement the void left by Iraq. Recall that Costa Rica reinstated 35% tariffs on non-U.S.-origin rice. There has been significant red tape because of cyber-attacks, Executive Decrees, and the simple politicization of food security. April 11 was supposed to be the day on which resolution would take place, but was further delayed now to the end of April. It is expected, that if the situation can be resolved and the market returns to “normal,” the U.S. could resume its exports to Costa Rica in the amount of 75,000 metric tons if not more. This would be significant because U.S. rice exports were only 7,200 MT in 2023.
In Asia, prices are still hovering just below $600 pmt and don’t show signs of dropping further. Thai prices are right at about $590 pmt, and Viet prices are slightly higher but below $600. Many were expecting a softening to emerge at the beginning of Q2 as India’s export ban has been expected to be removed, if not relaxed in some form. The Indian government has been quiet on its intentions to modify the ban in any way, therefore extending the firmness in price and the necessity to source products from any origin but India for the time being. The election starts today, April 19, and carries on for seven weeks; it will be interesting to see the position as the weeks roll by.
The weekly USDA Export Sales report shows sales of 5,900 MT—a marketing-year low—were down 88% from the previous week and 94% from the prior 4-week average. Exports of 51,100 MT were down 16% from the previous week and 42% from the prior 4-week average.
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