Significant increase in imports of long grain old and new crops – AgFax
Ripening rice field. Photo: Kathleen Phillips, Texas AgriLife Extension
The USDA released its monthly supply and demand report on Tuesday (July 12). Forecast for this month in 2022/2023. – higher total supply, increased domestic use, lower exports and higher ending stocks.
Total supply was boosted as higher beginning stocks and imports more than offset the decline in production. Initial reserves are 2.5 million weight tons. higher this month due to increased old crop imports (21/22). Production of long grain for the 2022 harvest decreased by 1.9 million cwt to 139 million t on smaller areas.
The decrease in the production estimate occurred as a result of the fact that 37 thousand hectares were harvested less. NASS June Sown area the study served as the basis for adjusting the sown and harvested areas this month. Long grain imports increased by 3 million to a record 33.0 million weight tons this month.
Domestic and residual use was increased by 2 million to 115.0 million wt. Exports fell by 1.0 million weight tons to 60.0 million due to lower production. Long grain exports will be the lowest since 1996. Projected ending stocks for 2022/23. will increase by 2.6 million to 21.9 million weight tons; down 12 percent from last year.
Table 1. US long-grain rice, supply and demand.
(unit: million watt)
|% Collected||98.3%||98%||98.6%||+ 0.6%|
|Beginning of inventory||29.7||22.4||24.9||+2.5|
|Domestic and residual use||118.0||113.0||115.0||+2|
|Inventory – Utilization %||13.8%||11.1%||12.5%||+1.4%|
|Average Farm Price ($/Cv)||13.70 dollars||$15.50||$15.50||0|
|Average farm price ($/bus.)||$ 6.17||$6.98||$6.98||0|
The 22/23 season average farm price (SAFP) for long grain was unchanged at a record $15.50/cwt or $6.98/bushel. It should be noted that the average farm price for the 21/22 season was reduced by 10c/cwt. to $13.70 or $6.17 per bushel. This will result in a price loss coverage (PLC) payment of 13 cents per bushel. The USDA will announce the final average price for the 21/22 season in October.
September rice futures settled 8.5 cents lower at $16.45 after Tuesday’s report. Still, there was a strong all-around sell-off in commodities and stocks on Tuesday. However, there is no doubt that the large increase in imports of old and new crops was bearish compared to long grains. Both marketing years 21 and 22 are projected to see record long-grain imports.
The September contract traded in a sideways range this week, finding support at $16.40 and resistance at $16.60. Trading was notably higher on Friday (15/07) as the weather forecast for next week calls for a resumption of intense heat and dryness in the Delta.
The foundation of the new crop remains strong in eastern Arkansas. The basis for August through October delivery at the mills is 14 cents per bushel futures. The base price of dryers for early fall delivery is in the range of 20 to 27 cents per bushel futures.
The chart below includes the red lines of the 20-day moving average and the green line of the 100-day moving average. Both cost around $16.49. A close above these moving averages to close out the week would be a favorable technical signal. The September contract has not closed above its 20-day moving average since June 6. As mentioned, the weather forecast for the near term is also supportive. Watch for a close above $16.60 to open for further upside.
https://agfax.com/2022/07/16/rice-market-significant-increases-to-old-and-new-crop-long-grain-imports/ Significant increase in imports of long grain old and new crops – AgFax