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31
May
2017
Uncertainty about U.S. long grain rice acreage supportive of prices
Author: Bobby Coats, Professor of Economics

By Bobby Coats, Professor of Economics

Domestic and global rice fundamentals remain bearish while U.S. acreage decrease may help firm near-term prices.

Presently, I am cautiously bullish on U.S. long grain rice prices.

The U.S. and global long grain rice market is a highly complex and a challenging marketplace, due to the extreme importance of the rice food grain in feeding the world’s population.

Rice is one of the most protected food grains in country after country around the world, as countries limit U.S. market access and competition. Most countries’ rice food security concerns will take priority over trade agreements.

Some key factors impacting global long grain rice trade and long grain rice prices are:

  • Bearish 2016-2017 domestic and global rice fundamentals
  • Global geopolitical challenges, uncertainties and food security issues
  • The currently supportive price impact of excessive rain, flooding, etc. on U.S. 2017 acreage, yield, production and quality
  • 2017-18 global production is expected to exceed consumption, and currently there is no expectation of a major disruptive weather event to change that outlook
  • Uncertainty about U.S. and global fiscal, monetary, trade and regulatory policy initiatives near term impact on reflating sluggish domestic and global growth. This has allowed global deflationary forces strong continued negative influence on the aggregate commodity sector.

2017/18 World Rice Supply and Demand

World Rice-Cliff Note Version

  • World rice acreage at 161.8 million hectares is the highest on record
  • World rice yield at 4.4 metric tons per hectare is consistent with previous four periods
  • World rice rough production at 717.8 million metric tons is the 2nd highest on record
  • World rice milled production at 481.3 million metric tons is the 2nd highest on record
  • World trade at 42.2 million metric tons is 3rd highest on record and, in-part, reflects global uncertainties
  • World rice total use at 480.1 million metric tons is the highest on record
  • World rice ending stocks at 119.8 million metric tons is the highest since 2001-02
  • 2017/18 world rice production of481.3 million tons is forecast to exceed 2017-18 total use of480.1 million tons by 1.2 million tons

Long Grain Rice Supply and Demand — Cliff Note Version:

USDA’s June 30, 2017 Acreage Report will provide an estimate that more nearly reflects current weather and flooding impacts.

  • 2017 long grain rice planted acres estimated at 1,909,000 acres 21 percent below 2016
    • 5-year average 2,044,400 acres
    • 10-year average 2,150,600 acres
    • 15-year average 2,229,267 acres
  • 2017-18 long grain rice beginning stocks at 28.7 million cwt.
    • Previous 5-year average was 22 million cwt.
    • Previous 10-year average was 24 million cwt.
  • 2017-18 long grain rice production is estimated at 142 million cwt.
    • 15 percent below 2016-17
    • 5-year average 148 million cwt.
    • 10-year average 149 million cwt.
  • 2017-18 long grain rice total supply is estimated at 191.7 million cwt.
    • 9-percent below 2016-17
    • 5-year average 190 million cwt.
    • 10-year average 191 million cwt.
  • 2017-18 long grain rice domestic and residual use is estimated at 95 million cwt,
    • 6th largest on record
    • 5-year average 95 million cwt.
    • 10-year average 94.5 million cwt.
  • 2017-18 long grain rice total exports is estimated at 76 million cwt,
    • 3 million cwt. below last year
    • 5-year average 72
    • 10-year average 73
  • 2017-18 long grain rice total use is estimated at 171 million cwt.
    • 10 million cwt below 2016-17
    • 5-year average 167 million cwt.
    • 10-year average 167 million cwt.
  • 2017-18 long grain rice ending stocks are estimated at 20.7 million cwt.
    • 28-percent below 2016-17
    • 5-year average 23 million cwt.
    • 10-year average 24 million cwt.

NASS Prospective Planting

  1. S. – Cliff Note Version

As previously stated USDA’s June 30, 2017 Acreage Report will provide an estimate that more nearly reflects current weather and flooding impacts.

  • 2017 Arkansas long grain rice planted acres estimated at 1,050,000 acres, 25.5 percent below 2016, 5-year average 1,150,000, 10-year average 1,202,000, 15-year average 1,250,000 acres
  • 2017 California long grain rice planted acres estimated at 9,000 acres the same as 2016, 5-year average 7,000, 10-year average 6,800, 15-year average 7,067 acres
  • 2017 Louisiana long grain rice planted acres estimated at 375,000 acres, 9.2 percent below 2016, 5-year average 387,000, 10-year average 405,500, 15-year average 415,467 acres
  • 2017 Mississippi long grain rice planted acres estimated at 375,000 acres, 9.2 percent below 2016, 5-year average 156,000, 10-year average 185,000, 15-year average 197,667 acres
  • 2017 Missouri long grain rice planted acres estimated at 200,000 acres, 13 percent below 2016, 5-year average 194,400, 10-year average 193,200, 15-year average 197,667 acres
  • 2017 Texas long grain rice planted acres estimated at 155,000 acres, 16.2 percent below 2016, 5-year average 150,000, 10-year average 158100, 15-year average 165,000 acres
  • 2017 United States long grain rice planted acres estimated at 1,909,000 acres, 21 percent below 2016, 5-year average 2,044,400, 10-year average 2,150,600, 15-year average 2,229,267 acres

Accompanying slideshow:  http://www.deltafarmpress.com/sites/deltafarmpress.com/files/World-Rice-Outlook-Slide-Show-May-2017.pdf


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