Developing Countries Will Lead Global Rice Import Growth in 2013-22, Says USDA Rice growers positive California MG prices are UP Russia MG Harvest coming to end Egypt open rice exports Vietnam’s rice export in tough competition with India Thai rice exports in May Rise Above Target This Year Viet-Nam Rice exports likely to fall this year
Australia Medium Grain Rice #1 $ N/A    Egypt 101 #2 $760    Egypt 178 #2 Rice $730    EU Prices Baldo €660    EU Prices LG-A Ariete 5% €550    EU Prices MG Lotto 5% €500    EU Prices RG Balilla 5% €500    Russia Rapan $ 700    USA Jupiter Paddy $375    USA Calrose #1 Paddy $480    USA Jupiter Rice $630    USA Calrose #1 $830   

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Corn harvest 90% complete, wheat 95%
Corn: We started the week’s reports with Monday’s weekly review. We started the week’s reports with Monday’s weekly export inspection report showing 34 million bushels of corn was inspected for near term export off 2 m.b. from the week prior and 13 under a year ago. We are about equal our year to date inspections. I see the lower week to date sales as typical ahead of a USDA monthly crop report. Monday’s crop progress report put harvest at 90% complete and with weather this week we should be 96% on Monday’s update, effectively ending the harvest season and any prospects for lower cash prices on supply side issues. Thursday’s weekly export sales report showed 884 t.m.t. were sold last week off 27% from the week prior and 8% under our four week average. Asian sales were soft at 275 t.m.t. versus 530 the week prior. The question here is the lower Asian sales due to pre USDA crop report hesitancy or concern over bird flu and feed demand. That is yet to play out. Thursday’s USDA monthly crop report put this year’s production at 11.032 b.b. the second largest in history second only to last year’s 11.807. The figure was 67 m.b. over our average pre-report guess and 175 m.b. over the October report. The 175 is a small number considering were talking 11 b.b. that much falls off the trucks hauling it into town. They pegged our carry over or ending stocks for the end of our marketing year next September 1st at 2.319 b.b. up 99 m.b. from last month’s report. They left exports unchanged probably until the Asian bird flu situation becomes clearer as over 70% or our exportable feed grains go to Asia. They inched up corn for ethanol production 25 m.b. to 1.5 b.b. to be used in 2006 and jumped food, seed and residual usage another 75 m.b. but production increase all offset it. So, where does that leave us? It leaves us with more corn than we know what to do with but it is more probable than not we have priced it in. Now that we are at harvest’s end and our last bearish crop report of the year is behind us we can start to anticipate a low to buy. Cash prices have firmed up the last week as farmers throw the tail end of harvest in on farm bins. Traders are heavily short December futures and have 12 days before December futures go into deliveries. Traders will want to buy back those shorts before then as deliveries in December will shrink open interest quickly making it hard to get out of positions as commercial traders will clear books ahead of year end. The question is will they buy back their short December positions and re-sell in March and May or buy spring month. Unless, the bird flu expands in Asian cutting exports of feed grains into the region it appears traders may begin to lightly buy March and May. Reasons, demand looks better on three fronts. One, increasing ethanol productions with plants in construction and on line for completion next year doubling production capacity. Two, more US livestock to feed and three, the dramatic increase in corn’s fertilizer costs look to have growers plant less corn this spring. On paper, the downside move on corn is not over until the worm turns and that means we need to see a technical reversal. March need a close over 2.11 and May 2.18. For speculators consider buying a March 2.00 put for 3 cents or 150 dollars and buy a May 2.20 call for 7cents or 350 dollars. You have 500 dollars total cost and end risk in the market. The put covers the near term downside and the May call covers the long side long term.

Wheat: Monday’s first report was our weekly export inspection report showing 17 m.b. were inspected for near term export off 5 m.b. from the week prior and 1 under a year ago, while year to date inspections show us down 63 m.b. on the year. Same old, same old, a market in search of a price to trigger some demand. Monday’s crop progress report put planting of our winter wheat crop at 95% complete with 84% emerged from the ground. Only North Carolina is out of line with planting averages at 44% complete. There downfall is drought like conditions leaving many acres to go unplanted. The condition report showed 57% of the nations winter wheat crop is in good to excellent condition, down from 61% the week prior and 78% a year ago. The problem areas are Texas at 34% G-E, Oregon 33%, and Missouri 40% G-E. the southern delta states have been too dry along with Texas while the north west has been too wet and cold. I am not concerned about the northwest, but the southern delta and far southwest dryness as that could continue long term as droughts do. It is early for quality concerns as the crops quality and yields are made in April and May when the head and kernels develop. But there is a clear trend of lower qualities and if quality is too low as we go dormant late month for winter then when we break dormancy next March. The hole maybe too deep to dig out of as perfect weather will be needed and perfect weather in a big country is hard to find. It is always too west here and too dry there. Time will tell. We need a high quality wheat crop of 75 to 80% or more to bring the US to a primary world port to buy high protein milling wheat come next June’s harvest. The best wheat area out there right now is soft red winter variety delivered against C.B.T. contracts. Grown from Illinois east to Ohio where weather has been decent. Thursday’s weekly export sales report showed 1.397 m.m.t. of wheat was sold last week, a new marketing year high since it began June 1st. The high number comes thanks to last week Iraq one time buy of 888 t.m.t. Take it away and sales are poor. I do not expect Iraq in again anytime soon. The trade views it as a aberration. Thursday’s USDA crop report brought only a modest change in wheat’s carry over with a 3 m.b. drop from the average pre-report guess but unchanged from last month at 530 m.b. Wheat is still poised to move lower fundamentally as we seek a price low enough to price low quality wheat into the feed ration or export market. December wheat has support at 3.05. If your short and we approach support consider taking near term profits as fund should be looking to cover many of their big short positions before month end deliveries begin. A month end short covering rally would only be temporary.
MGR Archive 14.11.2005
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Russia Rapan $ 700
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USA Calrose #1 $830
USA Calrose #1 Paddy $480
EU Prices Baldo €660
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