RICE REVIEW

Wednesday, May 20, 2015

OUTSIDE MARKETS

+ Agricultural futures finished mostly lower today. Jul corn prices continue to slide today, as the market is expecting adequate acres to be planted. The strengthening dollar remains a drag on markets as the commodities remain dependent on export markets. Jul beans continue to weaken. Prices continue to search for a new low as large U.S. and global supplies in 2015 continue to pressure prices. Jul wheat closed slightly higher. While recent weather events remain supportive for nearby contracts, the stronger dollar remains a concern. U.S. wheat exports have faced stiff competition in recent months and failed to compete in some markets.

MAJOR RICE NEWS TODAY

+ The USDA said that weekly rough rice prices were decreased by $0.21/cwt for both LG and MG/SG.
+ Thai media report - “The Department of International Trade Promotion (DITP) has expressed its confidence that the 7th Thailand Rice Convention 2015 will raise foreign importers’ confidence in the quality of Thai rice. Its objective is to reiterate to rice importers that Thailand is still the world’s leading rice exporter and a global rice hub. Participants of this event have been informed about the environmentally-friendly methods used in producing rice grains.”

+ Thai media report - “The Prime Minister has ordered the Commerce Ministry to quickly check the standard of rice mills nationwide to ensure the quality of Thai grain. While opening the Thailand Rice Convention 2015 at Impact Muang Thong Thani in Nonthaburi province Wed, he said that fierce competition in the global rice market, as well as the government's large expenditures for warehousing, required the government to have high-standard mills to ensure top quality. He said the government paid about 10b baht to millers to warehouse rice ever year. Substandard rice mills will be closed and the government will store rice with farmers' cooperatives instead, he said.”

+ Indian media report - “Establishment of monsoon conditions over Sri Lanka was the positive signal on a day when the India Met Department suffered a setback over both the seas around the South. Monsoon establishing over Sri Lanka is the most significant news after its onset over the Andaman and Nicobar Islands in Indian territorial waters on Sat last. But it has not been able to make any significant progress since. The Met merely hoped that it would cover more areas in the Bay of Bengal over the next two days. It had mentioned about the prospects of a low-pressure area developing in the Bay which could have revved up the Bay arm of the monsoon. This outlook has been withdrawn on Wed. The onset of monsoon over Kerala normally happens within a few days of that over Sri Lanka, and 10-12 days after Andaman and Nicobar Islands.”

+ CA media report - “With California farmers not planting as much rice due to water restrictions, Southern rice-growing states are jumping in to fill the gap by expanding their production and taking some of the Golden State's markets in the process. Although Southern states such as Arkansas and Louisiana typically grow LG rice and very little of the MG rice that is the dominant variety in California, Southern growers are devoting more acreage to MG in expectation of tighter supplies from California. More MG rice will be planted in the South again this year, as water restrictions force California farmers to decrease their plantings even further. Initial estimates from USDA indicate Southern growers intend to plant 311,000 acres of MG, while California farmers will grow 375,000 acres of MG and 408,000 acres of all rice varieties, a 6% reduction from 2014.”

CASH MARKET COMMENTS

+ The market was sideways today with little to no trading to report as most sellers remain on the sidelines hoping for prices to improve while buyers do the same. Analysts continue to note that without an increase in export demand prices will likely trend lower however some are hopeful that demand from either the Venezuela or Iraq will show up and support the market.

CBOT RICE

+ Rice futures traded in a relatively narrow range before closing lower. Heavy rains across Arkansas have some rice fields under water, but it remains to be seen how this will affect yields. Jul is building on support at the recent low of $9.25, which is the lowest price for the spot month in over 8 1/2 years. Poor demand could limit the price recovery.

GLOBAL RICE MARKETS

+ Thai prices were seen steady today.
+ Viet prices were seen steady today.
+ Indian prices were seen steady today.
+ Pakistani prices were seen steady today.
+ Chinese markets closed unchanged today.
+ Japanese markets closed unchanged today.
+ Brazilian cash paddy traded 0.63% lower yesterday.

***Data and news source: www.oryza.com***