Oryza Overnight Recap – Chicago Rough Rice Futures Hammered Once Again
Overnight as Sellers Follow-through on Yesterday’s Action; Soy and Corn
Supported After Yesterday’s Rally
Chicago rough rice
futures for Nov delivery are currently noted 20 cents per cwt (about $4 per
ton) lower at $12.395 per cwt (about $273 per ton) ahead of early floor trading
in Chicago. The other grains are seen trading with mixed results overnight;
soybeans are currently seen trading about 0.4% higher, wheat is listed about
0.1% lower and corn is currently noted 0.4% higher.
U.S. stock index
futures pointed to a slightly higher open on Wednesday amid earnings from big
name financial companies and some top-tier data releases that will be closely
watched by investors for hints on the strength of the U.S. economy. Earnings
could be a particular challenge for stocks this quarter, with analysts
expecting a 4.8% decline in S&P 500 profits, according to Thomson Reuters.
So far, there's been a trickle of reports, but the season gains momentum
Wednesday with results from the major financials and others. On the data front
U.S. retail sales barely rose in September as cheaper gasoline weighed on
service station receipts, while producer prices posted their biggest decline in
8 months. August business inventories data are also due at 10:00 a.m. and the
U.S. Federal Reserve's latest Beige Book at 2:00 p.m. Chinese inflation data,
released overnight also weighed on sentiment, cooling more than expected last
month, adding to concerns about the health of the world's second-biggest
economy. The weak data weighed on Asian and European stocks, with major indices
in Europe falling in the region of 1% in mid-morning London trade. Gold is
currently trading about 0.7% higher, crude oil is seen trading about 0.6%
lower, and the U.S. dollar is currently trading about 0.5% lower at 8:15am
Chicago time.
California Rice Growers Estimate 2015 Output to Fall 8% y/y to 1.55 Million
Tons
Oct 14, 2015
Californian rice
growers, who are midway through this year's harvest are expecting the state's
rice output to decline to around 1.55 million tons, down about 8% from around
1.68 million tons in 2014, according to Capital Press.
The decline in output
may be attributed to a decline on acreage as well as yields. Californian
farmers planted rice in about 148,000 hectares of land compared to about
172,400 hectares last year due to water shortages. The state is enduring the
fourth year of drought, which has led to a significant decline in water levels
in most of the reservoirs.
The yields are also
expected to decline to about 7 tons per hectare, down from about 7.22 tons per
hectare last year.
Meanwhile, water
shortages are likely to impact migratory bird habitat this winter, according to
the state's Farm Bureau. Californian farmers normally create about 120,000
hectares of managed wetlands during the rice-growing season. But last year they
could create only 40,000 hectares of wetlands. This year, the Bureau expects
them to create about 20,000 hectares.
Most of the rice
growers are expecting prices to increase. If prices don't increase they are
concerned that their margins would suffer severely.
California is the
second largest rice producing state in the U.S. after Arkansas and
typically contributes to about 25% of the total rice grown in the U.S.
annually. The state's rice sector employs about 25,000 people grows
medium-grain rice and most of the rice grown here is exported.
Currently, export
prices of the U.S. medium grain rice stand at around $835 per ton, down about
9% from around $915 per ton at the beginning of this year.
Indonesia Will Decide on Rice Imports after November 2015, Says Minister
Oct 14, 2015
Indonesia, which has
signed purchase contracts with Vietnam and Thailand to import rice in case of a
need, will decide about the imports in November at the earliest or in December,
according to Reuters.
The Coordinating
Minister for Economic Affairs told reporters that the decision would be taken
after looking at the harvests, which will continue till the end of October
2015.
"We have reached
agreements with Vietnam and Thailand. Based on the agreements, Indonesia will
decide on the time of the imports. When we put forth a request, they need a
month to dispatch," he was quoted.
Though the Agriculture
Minister has been saying that the agency has about 1.7 million tons of stocks
and they are sufficient till the end of the year, increasing rice prices have
become a cause of concern. "The price of rice has increased by 10 percent
over the last two months. It indicates that the stocks are decreasing,"
the Minister said.
Indonesian rice
production is likely to be impacted by a drought-inducing El Nino phenomenon,
which is expected ti be stronger than that than that experienced in the
1997-1998 period.
Oryza Afternoon Recap - Chicago Rough Rice Futures Continue to Crater on
Lack of Action in Cash Market; Grains Reverse Course as Traders Book Profits
Following Yesterday's Rally
Oct 15, 2015
Chicago rough rice
futures for Nov delivery settled 45 cents per cwt (about $10 per ton) lower at
$12.145 per cwt (about $268 per ton). The other grains finished the day in the red
as well; Soybeans closed about 0.4% lower at $9.1050 per bushel; wheat finished
about 2.1% lower at $5.0825 per bushel, and corn finished the day about 1.4%
lower at $3.7900 per bushel.
U.S. stocks traded
mixed Wednesday as investors digested earnings reports and economic data. U.S.
retail sales barely rose in September as cheaper gasoline weighed on service
station receipts, while producer prices posted their biggest decline in 8
months. August business inventories remained unchanged while economists expected
a 0.1% increase. The U.S. Federal Reserve's latest Beige Book is scheduled for
release at 2:00 p.m. Overseas, equities were lower after weaker-than-expected
Chinese inflation data added to concerns about the health of the world's
second-biggest economy. In early afternoon trade, the Dow Jones Industrial
Average declined 99 points, or 0.58%, at 16,983. The S&P 500 traded down 3
points, or 0.15%, at 2,000, with consumer staples leading four sectors lower
and materials the greatest advancer. The Nasdaq traded up 8 points, or 0.16%,
at 4,804. Gold is trading about 0.1% higher, crude oil is seen trading about
0.1% higher, and the U.S. dollar is seen trading about 0.1% lower about
1:15pm Chicago time.
Tuesday, there were
2,084 contracts traded, up from 765 contracts traded on Monday. Open interest –
the number of contracts outstanding – on Tuesday decreased by 2221 contracts to
12,471.
Nigeria to Collaborate with Brazil to Develop Rice Sector, Boost Production
Oct 14, 2015
The governments of
Nigeria and Brazil have decided to work together to enhance agricultural
research in Nigeria as well as boost food production and security in the
country, according to local sources.
The Permanent
Secretary of Nigeria's Agriculture Ministry told local sources that the
collaboration would enhance investment in agricultural research in the country.
He noted that they are keen on transforming the working structure of
Agricultural Research Council of Nigeria (ARCN) on the lines of its Brazilian
counterpart.
The work plan especially
involves the development of the rice sector, which seeks to achieve
self-sufficiency in production. The Ministry is keen on borrowing ideas from
Brazil to achieve the task. The collaboration would particularly seek to
improve rice cooperatives, rice value chain, rice milling equipment and
agribusiness activities.
"The partnership
would see Nigeria attains self-sufficiency in agricultural production with the
application of technology, to improve its economy, said the Vice President of
Nigerian-Brazilian Chamber of Commerce & Industry.
Brazil has also
reportedly offered to export rice to Nigeria and has sought the government to
relax the barriers on rice importation. However, the Nigerian Investment
Promotion Commission (NIPC) Executive Secretary noted that Nigeria is seeking
Brazil's support in improving the quality and quantity of rice production in
the country as Nigeria itself is a major market.
“We want to borrow a
leaf from Brazil to be a major producer, consumer and be the net exporter in the
areas where we have the comparative advantage," she said.
A trade delegation
from Brazil that visited Nigeria early this week noted that Brazil's
investments in Nigeria would focus on rice production, housing, and waste
recycling.
Thailand Cancels Sales of 345,472 Tons of Rice from Previous Auction
Oct 14, 2015
The government of
Thailand has cancelled sales of around 345,472 tons of stockpiles rice made in
the auction conducted on September 29, 2015, because prices have increased
since the auction, Reuters quoted the Commerce Minister.
Thailand will retain
sales of around 100,000 tons made to four bidders, according to the Permanent
Secretary for Commerce. She told reporters that sales made to about twelve
bidders are cancelled due to low prices offered.
This is the seventh
auction this year and eleventh one after the military government took over in
May 2014. . It sold around 4.56 million tons of stockpiled rice raising around
48.6 billion baht (around $1.36 billion) in the ten auctions conducted since it
took over in May 2014.
The military
government still holds 13.5 million tons of rice in its stockpiles.
Export quotes of Thai
5% broken rice have been increasing over the past few weeks due to increasing
demand from the Philippines and other importing nations. They stand at around
$360 per ton, up about $10 per ton from the end of September.
TPP Ensures Gradual Elimination of Rice Import Tariffs in Member Countries
Oct 14, 2015
The Trans-Pacific
Partnership (TPP) deal finalized last week has reportedly ensured that tariffs
on rice imports will eventually be eliminated by the member countries in the
next ten years, according to a statement by the USDA.
Japan, Malaysia,
Vietnam and the U.S. have agreed to alter or gradually remove tariffs on rice
imports.
Japan, which has been
adamant on increasing duty-free rice imports from the U.S. has agreed to
initially allow 50,000 tons of duty-free rice imports from the U.S. and
gradually increase up to 70,000 tons by thirteenth year. Japan will reportedly
increase imports from the U.S. by 2,000 tons from the fourth year of the
agreement. Japan will also modify its quota administration to enhance the
transparency and effectiveness of the new country specific quota (CSQ). It has
also agreed to immediately eliminate its 36 yen per kilogram (12.7% ad valorem
equivalent) tariff on other animal feeds, containing rice.
Malaysia will
eliminate tariffs on rice, currently ranging from 15-40%, in ten years and lock
in tariffs on rice products at zero percent.
Vietnam will eliminate
its tariffs on rice, which are currently at 40% with immediate effect. It will
also eliminate its tariffs on rice products, currently as high as 35%, in eight
years or before.
The U.S. will
eliminate tariffs on rice products, currently as high as 11.2%, in zero to 15
years.
Vietnam Plans to Develop National Rice Brand Based on
Jasmine Rice Type
Oct 14, 2015
The Vietnam Food
Association (VFA) is planning to develop a national brand for Vietnam's rice
based on the jasmine type, local sources quoted the Chairman of the VFA.
He told local sources
that they selected the jasmine rice type because the fragrant rice exports of
the country have increased significantly in recent years. The proportion of
fragrant rice exports in the country's total rice exports has reportedly
increased to 26% in the first nine months of 2015 from a meagre 3% in 2007.
Price of fragrant rice also has consistently increased to current $600 per ton
from about $460 per ton in the past.
The VFA Chairman noted
that building a national brand would take time. They need to invest in
large-scale fields for fragrant rice production to secure stable supply, he
said. The VFA is planning to collaborate with a number of corporate partners to
develp such fields.
Vietnam exported about
4.35 million tons of rice in January 1 - September 30, 2015, down about 9% from
about 4.8 million tons of rice exported in first nine months of 2014, according
to data from the VFA. The average rice export price so far in this year stands
at about $420.77 per ton (FOB), down about 2.6% per ton from about $432 per ton
recorded during same last year.
Export quotes for
Vietnam 5% rice have increased during the past month due to new demand from the
Philippines. They currently stand at around $355 per ton, up about 9% from
around $325 per ton last month. However, they are still 19% lower from their
year-ago level of around $440 per ton.
Thailand Rice Sellers Alter Some of Their Quotes Today; Other Asian Quotes
Remain Unchanged
Oct 14, 2015
Thailand rice sellers
lowered their quotes for 100% rice and 5% broken rice varieties by about $5 per
ton each to around $365 - $375 per ton and $355 - $365 per ton respectively.
They increased their quoted for Hom Mali rice by about $5 per ton to around
$815 - $820 per ton. Other Asian rice sellers kept their quotes unchanged.
5% Broken Rice
Thailand 5% rice is
indicated at around $355 - $365 per ton about $5 per ton premium on Vietnam 5%
rice shown at around $350 - $360 per ton. India 5% rice is indicated at around
$355 - $365 per ton, about $50 per ton premium on Pakistan 5% rice shown at
around $305 - $315 per ton.
25% Broken Rice
Thailand 25% rice is
indicated at around $330 - $340 per ton, about 5% discount on Vietnam 25% rice
shown at around $335- $345 per ton. India 25% rice is indicated at around $315
- $325 per ton, about $35 per ton premium on Pakistan 25% rice shown at around
$280 - $290 per ton.
Parboiled Rice
Thailand parboiled
rice is indicated at around $365 - $375 per ton. India parboiled rice is
indicated at around $335- $345 per ton, about $70 per ton discount to Pakistan
parboiled rice last shown at around $405 - $415 per ton.
100% Broken Rice
Thailand broken rice,
A1 Super is indicated at around $305 - $315 per ton, at par with Vietnam 100%
broken rice shown at around $305 - $315 per ton. India's 100% broken rice is
shown at around $300 - $310 per ton, about $25 per ton premium on Pakistan
broken sortexed rice shown at around $275 - $285 per ton.
South Korea's 2015 Rice Output May Increase Slightly on Better Yields, Says
Ministry
Oct 14, 2015
South Korea's rice
production is estimated to increase about 0.4% to around 4.258 million tons,
basis milled, in 2015 from around 4.241 million tons in 2014 due to higher
yields, local sources quoted the Ministry of Agriculture, Food and Rural
Affairs.
"Overall output
is expected to increase marginally as the average yield from each unit area of
10 hectares is predicted to rise," the Ministry was quoted.
"Favorable weather conditions from June onward and almost no crop damage
caused by parasites and typhoons are raising expectations of better yields this
year," it added.
Based on data from the
Statistics Korea, the Ministry noted that the country's average yield is
estimated to increase to around 5.33 tons per hectare this year, up about 2.5%
from around 5.2 tons per hectare last year. The paddy rice acreage in the
country has declined to around 799,344 hectares, down about 2% from around
815,506 hectares, according to the Ministry.
The Ministry noted
that it is planning to introduce measures for stabilizing market prices of
rice. Some of these measures include encouraging private processing units to
buy more rice, strengthening monitoring of imported rice and regulating the
country's stockpile.
The country's current
rice reserves stand at around 1.32 million tons. The Ministry is expecting the
demand for rice at around 3.97 million tons in 2016. The government is
currently facing the challenge of falling consumption and increasing stocks.
The government opened
its rice import market starting January 1, 2015 and decided to impose tariffs
of 513% on rice imports over and above its mandatory rice imports of 408,700
tons under the World Trade Organization (WTO) minimum market access (MMA)
quota.
Global Rice Quotes
October 15th, 2015
Long grain white rice - high quality
Thailand 100% B grade 370-380
↑
Vietnam 5% broken 355-365
↑
India 5% broken 355-365
↔
Pakistan 5% broken 305-315
↔
Myanmar 5% broken 415-425
↔
Cambodia 5% broken 415-425
↔
U.S. 4% broken 490-510
↔
Uruguay 5% broken 535-545
↔
Argentina 5% broken 530-540
↔
Long grain white rice - low quality
Thailand 25% broken 330-340
↔
Vietnam 25% broken 335-345
↔
Pakistan 25% broken 280-290
↔
Cambodia 25% broken 400-410
↔
India 25% broken 315-325
↔
U.S. 15% broken 500-510
↔
Long grain parboiled rice
Thailand parboiled 100% stxd 365-375 ↔
Pakistan parboiled 5% broken stxd 405-415 ↔
India parboiled 5% broken stxd 335-345 ↔
U.S. parboiled 4% broken 590-610
↔
Brazil parboiled 5% broken 545-555
↔
Uruguay parboiled 5% broken NQ
↔
Long grain fragrant rice
Thailand Hommali 92% 820-830
↑
Vietnam Jasmine 465-475
↔
India basmati 2% broken NQ
↔
Pakistan basmati 2% broken NQ
↔
Cambodia Phka Mails 830-840
↔
Brokens
Thailand A1 Super 305-315
↔
Vietnam 100% broken 305-315
↔
Pakistan 100% broken stxd 275-285
↔
Cambodia A1 Super 355-365
↔
India 100% broken stxd 300-310
↔
Egypt medium grain brokens NQ
↔
U.S. pet food 330-340
↔
Brazil half grain NQ ↔
All prices USD per ton, FOB vessel, oryza.com
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