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USDA Rice Outlook


16 September 2013

USDA Rice Outlook - September 2013USDA Rice Outlook - September 2013


USDA Rice Outlook

There were several revisions to the U.S. 2013/14 U.S. balance sheet this month. On the supply side, the U.S. crop forecast was raised 2 percent to 185.1 million cwt, a result of both a higher yield forecast and slightly more area. Beginning stocks were raised 1.9 million cwt to 36.4 million based on data from the August Rice Stocks. These revisions raised the total supply forecast 2 percent.

On the use side, total domestic and residual use was raised 4.0 million cwt to 116.0 million cwt primarily based on an expected larger residual component resulting from a larger crop. Exports were raised 2.0 million cwt to 98.0 million cwt based on larger U.S. supplies. These revisions resulted in a 0.4-million cwt drop in the 2013/14 ending stocks forecast to 30.0 million cwt.

The 2013/14 season-average farm price (SAFP) for U.S. long-grain rice remains forecast at $14.00-$15.00 per cwt. The combined medium- and short-grain 2013/14 U.S. SAFP is forecast at $16.30-$17.30 per cwt, up 50 cents on both the high and low ends from last month’s forecast.

Global rice production for 2013/14 is forecast at a record 476.8 million tons (milled basis), down 1.2 million tons from last month’s forecast but up almost 2 percent from a year earlier. Production forecasts were lowered this month for Brazil, China, Panama, and South Korea, but raised for the United States.

Global rice use (including a residual component) for 2013/14 is projected at a record 474.6 million tons, down 0.7 million tons from last month’s forecast, with China, India, and the Philippines accounting for most of the downward revision in the 2013/14 global rice domestic disappearance forecast. The global ending stocks forecast was lowered slightly to 107.4 million tons, with China accounting for most of the downward revision.

Total calendar year 2014 global rice trade is forecast at 39.0 million tons, up 0.35 million tons from last month’s forecast and almost 0.7 million tons above this year.

Export forecasts were raised for India and the United States. Import forecasts for both 2013 and 2014 were raised Iran, but lowered for the Philippines.

Prices for most grades of Thailand’s higher and medium-quality regular-milled white rice declined 5-8 percent over the past month, mostly due to lower domestic prices and a depreciation of the Thai baht compared with the U.S. dollar. Price quotes from Vietnam have also declined over the past month, mostly due to a lack of new buyers except for China. U.S. long-grain export prices for both milled and rough-rice have increased slightly since early August. Prices for California milled rice for the U.S. market and for export have remained unchanged over the past month.

Domestic Outlook

 U.S. 2013/14 Rice Production Forecast Raised to 185.1 Million Cwt

The 2013/14 U.S. rice crop is projected at 185.1 million cwt, up 2 percent from last month’s forecast but still 7 percent below a year earlier. By class, the U.S. 2013/14 long-grain crop is projected at 126.5 million cwt, up 1.8 million cwt from last month’s forecast but 12 percent below a year earlier and the second smallest since 1997/98. Combined medium- and short-grain production is projected at 58.5 million cwt, up 1.9 million cwt from last month’s forecast and 6 percent larger than a year earlier.

This month’s upward revision in total U.S. rice production is based on both a higher yield forecast and a larger area estimate. At a record 7,511 pounds per acre, the 2013/14 all rice average yield is 105 pounds higher than last month’s forecast and 62 pounds above a year earlier. Yield estimates were raised this month for Arkansas, Louisiana, Mississippi, and Missouri, but lowered for Texas. California’s yield estimate was unchanged from last month.

Planted area is estimated at 2.49 million acres, up 15,000 acres from the previous estimate but still 8 percent below a year earlier and the smallest U.S. rice plantings since 1987/88. Area estimates were raised slightly this month for Arkansas, California, Louisiana, and Texas, but lowered for Mississippi and Missouri, with Mississippi’s 2013/14 area estimate lowered 19 percent from a month earlier. Production forecasts were raised for Arkansas, California, Louisiana, and Texas, but lowered for Mississippi and Missouri.

Rice plantings in 2013/14 are estimated to be lower than a year earlier in Arkansas and Missouri, but higher than last year in Louisiana and Texas and unchanged in California. Rice plantings in Arkansas in 2013/14 are estimated at 1.076 million acres, a decline of 17 percent from a year earlier and the smallest since 1987/88. Missouri’s 2013/14 rice plantings are estimated at 156,000 acres, down 13 percent from last year and the smallest since 1997/98. This year, many growers in these two Delta States shifted area from rice to more profitable alternative crops, primarily corn and soybeans. In contrast, rice area in Louisiana increased 15,000 acres to 417,000 acres and rice plantings in Texas expanded 10,000 acres to 145,000 acres. Rice plantings in California are estimated at 561,000 acres and in Mississippi at 130,000 acres, both unchanged from last year.

Record yields are projected higher than a year earlier in 2013/14 for all reported States except Arkansas and Mississippi, with record yields projected for Louisiana, Missouri, and Texas. At 8,300 pounds per acre, California’s 2013/14 rice yield is up 2 percent from a year earlier. Louisiana’s 2013/14 rice yield is estimated at 6,800 pounds per acre, an increase of 6 percent from a year earlier. Missouri’s 2013/14 yield of 7,010 pounds per acre is 20 pounds above a year earlier. The average rice yield in Texas is estimated at 8,600 pounds per acre, 3 percent higher than a year earlier. In contrast, Arkansas’ average is estimated at 7,350 pounds per acre, a decline of almost 2 percent from the year-earlier record. Mississippi’s yield of 7,100 pounds per acre is more than 1 percent below the year-earlier record. Much of the Delta experienced a cooler and wetter than normal spring that delayed plantings and slowed growth.

Rice crops are projected smaller than a year earlier in Arkansas, Mississippi, and Missouri. At 78.6 million cwt, Arkansas’ 2013/14 rice crop is 18 percent below a year earlier, mostly due to weaker plantings. Mississippi’s crop is projected at 9.16 million cwt, down 1.4 percent from a year earlier, a result of a weaker yield. Missouri’s 2013/14 rice crop is projected at 10.73 million cwt, down 13 percent from last year because of smaller area. In contrast, Louisiana’s 2013/14 production forecast of 28.0 million cwt is 10 percent above a year earlier, a result of a record yield and expanded area. The Texas 2013/14 crop of 12.4 million cwt is more than 10 percent larger than last year’s crop, a result of a record yield and expanded area. Higher yields caused California’s 2013/14 production to increase more than 2 percent to 46.15 million cwt.

Rice Harvest in the Delta Remains Behind the Normal Pace

For the week ending September 8, 24 percent of the U.S. 2013/14 rice crop was reported harvested, behind 50 percent reported last year and behind the U.S. 5-year average of 34 percent. Crop progress remains behind normal in all three Delta States. In Arkansas, 11 percent of the 2013/14 rice crop was reported harvested by September 8, behind the State’s 5-year average of 30 percent. In Mississippi, just 9 percent of the 2013/14 rice crop was reported harvested by September 8, well behind the State’s 5-year average of 41 percent. Harvest had not begun in Missouri by September 8. Typically, 16 percent of Missouri’s rice crop is harvested by that date.

On the Gulf Coast, 89 percent of Louisiana’s 2013/14 crop was reported harvested by September 8, 12 percentage points ahead the State’s 5-year average. In Texas, 94 percent of the crop was reported harvested by September 8, slightly ahead of the State’s 5-year average of 92 percent. The California crop was reported 4 percent harvested by September 8, slightly ahead of State’s 5-year average of 2 percent.

Data from the August 27 Rice Stocks report indicate total U.S. rice stocks on August 1, 2013 of 36.4 million cwt (combined milled- and rough-rice stocks on a rough-basis), up 5 percent from the August WASDE forecast but 11 percent below a year earlier. By class, long-grain stocks on August 1 are calculated at 21.9 million cwt (rough-basis), up 7 percent from the August WASDE but 10 percent below a year earlier. Combined medium- and short-grain stocks are calculated at 12.2 million cwt rough-basis), up 1.6 percent from the August WASDE but 17 percent below a year earlier. Stocks of brokens, not classified by class, are calculated at 2.3 million cwt (rough-basis), up almost 10 percent from a year earlier.

By State, Arkansas accounted for most of the indicated year-to-year decline in U.S. rice stocks. Rice stocks in Arkansas on August 1, 2013, were down 35 percent from a year earlier. Stocks were reported smaller than a year earlier in Texas and Mississippi as well. In contrast, rice stocks on August 1 were reported higher than a year earlier in California, Louisiana, and Missouri.

 U.S. 2013/14 Rice Supplies Are Projected To Decline 7 percent

Total U.S. rice supplies in 2013/14 are projected at 244.0 million cwt, 2 percent above last month’s forecast but 7 percent smaller than a year earlier. These are the smallest U.S. rice supplies since 2003/04. Long-grain total supplies are forecast at 168.4 million cwt, 2 percent above last month’s forecast but 10 percent below a year earlier. Combined medium- and short-grain total supplies are forecast at 73.2 million cwt, up 3 percent from last month’s forecast and 1.5 percent above a year earlier.

At 36.4 million cwt, the 2013/14 carryin is 1.9 million cwt above last month’s forecast but 11 percent smaller than a year earlier. The upward revision in the 2013/14 carryin was based on data from the August Rice Stocks report. The 2013/14 long-grain carryin is forecast at 21.9 million cwt, up 1.5 million cwt from last month’s forecast but 10 percent below a year earlier. Combined medium- and short-grain carryin is forecast at 12.2 million cwt, 1.6 percent above last month’s forecast but still 17 percent below a year earlier.

Imports of all rice in 2013/14 remain forecast at 22.5 million cwt, 7 percent above a year earlier and the second highest on record. Long-grain imports remain projected at a record 20.0 million cwt, 7 percent higher than a year earlier. Thailand, India, and Pakistan typically supply the bulk of U.S. long-grain rice imports. In years of tight supplies of U.S. rice, Vietnam will often ship brokens to the U.S. for processed uses. Canada ships small amounts of rice flour to the United States. All rice processed or consumed in Canada is imported, mostly from the United States.

Combined medium- and short-grain imports remain projected at 2.5 million cwt, almost 8 percent above a year earlier. Specialty rice from Thailand accounts for the bulk of U.S. rice imports of medium- and short-grain rice. Arborio rice from Italy accounts for much of the remainder of U.S. imports of medium- and short-grain rice.

U.S. 2013/14 Export Forecast Raised to 98.0 Million Cwt

Total use of U.S. rice in 2013/14 is projected at 214.0 million cwt, up 6.0 million cwt from last month’s forecast but still 5 percent below a year earlier. Forecasts for both exports and total domestic and residual use were raised this month. Longgrain total use is projected at 150.0 million cwt, up 3.0 million cwt from last month’s forecast but 9 percent below a year earlier. Combined medium- and shortgrain use is projected at 64.0 million cwt, up 3.0 million cwt from last month’s forecast and almost 7 percent above a year earlier.

Total domestic and residual use of all rice in 2013/14 is projected at 116.0 million cwt, up 4.0 million cwt from last month’s forecast but still 2 percent smaller than a year earlier. The upward revision was largely based on an expected larger residual component due to a larger crop. The residual accounts for unreported losses in processing, transporting, and marketing, as well as any statistical error in another component of the supply and use table. Long-grain domestic and residual use is projected at 84.0 million cwt, up 3.0 million cwt from last month but 6 percent below a year earlier.

Combined medium- and short-grain domestic and residual use is projected at 32.0 million cwt, up 1.0 million cwt from last month’s forecast and 11 percent larger than a year earlier.

Total exports in 2013/14 are projected at 98.0 million cwt, up 2.0 million cwt from last month’s forecast but 8.5 percent below a year earlier. The upward revision was primarily based on larger U.S. supplies. Long-grain exports remain projected at 66.0 million cwt, 13 percent below a year earlier. The U.S. is likely to lose market share in the Middle East and Sub-Saharan Africa to lower priced Asian suppliers in 2013/14. Combined medium- and short-grain exports are projected at 32.0 million cwt, up 2.0 million cwt from last month’s forecast and 3 percent above a year earlier.

By type, rough-rice exports remain projected at 35.0 million cwt, up 0.8 million cwt from the year-earlier revised estimate. Latin America is expected to remain the top market for U.S. rough-rice exports, with Southern long-grain accounting for nearly all of the U.S. rough-rice shipments to the region. Combined milled- and brownrice exports (on a rough basis) are projected at 63.0 million cwt, up 2.0 million cwt from last month’s forecast but 14 percent below a year earlier. The Middle East and Sub-Saharan Africa are expected to account for the bulk of the decline in U.S. milled-rice exports in 2013/14.

Through September 5, data from the weekly U.S. Export Sales report combined U.S. commercial shipments and outstanding sales 13 percent behind a year earlier. Except for U.S. milled medium- and short-grain exports, total commitments are behind a year earlier for all classes of U.S. rice exports. By market, outstanding sales to the Western Hemisphere are well behind a year earlier. A delayed harvest in the Delta has contributed to a slow pace of exports of long-grain rice early in the market year.

U.S. ending stocks of all rice in 2013/14 are projected at 30.0 million cwt, down 0.4 million cwt from last month’s forecast and 18 percent below a year earlier. These are the lowest U.S. ending stocks since 2007/08. The stocks-to-use ratio is calculated at 14.0 percent, down slightly from 16.2 percent in 2012/13.

By class, the 2013/14 U.S. long-grain carryout is projected at 18.4 million cwt, up 1 percent from last month’s forecast but 16 percent smaller than a year earlier. The long-grain stocks-to-use ratio is calculated at 12.3 percent, up from 13.2 percent a year earlier. The medium- and short-grain carryout is projected at 9.2 million cwt, up almost 9 percent from last month’s forecast but 24 percent below a year earlier. The medium/short-grain stocks-to-use ratio is calculated at 14.4 percent, down from 20.4 percent in 2012/13 and the lowest since 1998/99.

There were several small revisions to the 2012/13 U.S. rice balance sheet this month based on Census trade data and data from the August Rice Stocks report. First, both total exports and total imports were raised fractionally based on August- July Census trade data. Second, the 2012/13 ending stocks estimate was raised 1.9 million cwt to 36.4 million. These revisions in supply and use were offset by a lower domestic and residual use estimate for 2012/13. Long-grain accounted for the bulk of the 2012/13 revisions.

U.S. 2013/14 Season-Average Farm Price Forecast Raised for Mediumand Short-Grain Rice

The 2013/14 season-average farm price (SAFP) for U.S. long-grain rice remains forecast at $14.00-$15.00 per cwt, compared with $14.40 per cwt a year earlier. On an annual basis, the impact of tighter U.S. supplies is expected to nearly offset the effects of larger exportable supplies in Asia. The combined medium- and shortgrain 2013/14 U.S. SAFP is forecast at $16.30-$17.30 per cwt, up 50 cents on both the high and low ends from last month’s forecast. This compares with a 2012/13 revised SAFP for medium- and short-grain of $16.70 per cwt. Both monthly reported cash prices and marketings for 2012/13 for all rice and by class were revised in the August 27 Agricultural Prices.

In late August, NASS reported a mid-August U.S. long-grain rough-rice price of $15.10 per cwt, unchanged from the revised July estimate. The August preliminary price is the highest since January 2009. The July price was raised 10 cents to $15.10 per cwt. For combined medium- and short-grain rice, the mid-August NASS price was reported at $17.30 per cwt, up 90 cents from the revised July price. The July price was lowered 50 cents from the midmonth estimate to $16.40 per cwt.

International Outlook

 Production Forecasts for 2013/14 Lowered for China, Brazil, South Korea, and Panama

Global rice production for 2013/14 is forecast at a record 476.8 million tons (milled basis), down 1.2 million tons from last month’s forecast but up almost 2 percent from a year earlier. The bumper global crop is the result of expanded area. At a record 161.2 million hectares, global rice area in 2013/14 is up 2.5 percent from a year earlier. Burma, Cambodia, China, India, Nigeria, Pakistan, and Thailand account for most of the year-to-year area increase. Much of this area expansion is driven by higher government support prices. The average global yield, forecast at 4.41 tons per hectare (on a rough-rice basis), is slightly below the 2012/13 record. The yield decline is partly due to area shifts by country as well as adverse weather in China, the world’s largest rice producing country.

There were four downward revisions to 2013/14 crop forecasts this month, two in East Asia and two in Latin America. First, China’s 2013/14 production forecast was lowered 1.0 million tons to 142.0 million tons based on hot and dry weather this summer in Hunan, the lower Yangtze River, and the southwest that stressed the single rice crop. In addition, the northeast is experiencing heavy rains and cooler than normal temperatures that have slowed development. Second, South Korea’s 2013/14 production forecast was lowered 52,000 tons to 4.17 million tons based on a smaller area estimate reported by the Government.

In Latin America, Brazil’s 2013/14 production forecast was lowered 0.2 million tons to 8.3 million tons based on a lower area estimate. Returns to rice are not sufficient to justify a higher estimate. The bulk of Brazil’s rice crop will be planted in October and November for harvest in April and May, with Rio Grande do Sul accounting for about two-thirds of total production. Finally, Panama’s 2013/14 production forecast was lowered 25,000 tons to 150,000 tons based on a lower area estimate.

These downward revisions were partially offset by one upward revision: the U.S. 2013/14 production forecast was raised 118,000 tons to 5.90 million tons largely based on a higher average yield. The yield of 8.42 pounds per hectare is the highest on record. The U.S. area estimate was fractionally raised.

The 2012/13 global rice production estimate was raised almost 0.1 million tons to 470.0 million tons, almost 1 percent larger than a year earlier. There were four production revisions for 2012/13, most in Latin America. First, Argentina’s production estimate was raised 104,000 tons to 1.014 million tons based on a higher area estimated reported by the Ministry of Agriculture. Second, the Philippines’ 2012/13 production estimate was raised 78,000 tons to 11.43 million tons based on recommendation from the USDA Office in Manila and data from the Bureau of Agricultural Statistics. These two upward revisions were partially offset by two reductions. First, Brazil’s 2012/13 crop estimate was lowered 95,000 tons to 8.065 million tons based on a smaller area estimate reported by CONAB. Second, Panama’s crop was reduced 13,000 tons to 161,000 tons based on a smaller area estimate.

Global rice use (including a residual component) for 2013/14 is projected at a record 474.6 million tons, down 0.7 million tons from last month’s forecast but up more than 1 percent from a year earlier. China, India, and the Philippines account for most of the downward revision in the 2013/14 global rice domestic disappearance forecast. These downward revisions were partially offset by higher domestic disappearance forecasts for Iran and the United States. On an annual basis, Bangladesh, Cambodia, China, Egypt, India, Indonesia, Thailand, and Vietnam account for most of the projected increase in global consumption in 2013/14. In contrast, consumption (including a residual component) is projected to decline in 2013/14 in Japan, North Korea, South Korea, and the United States. Consumption has declined for several decades in both Japan and South Korea due to diet diversification. North Korea faces food deficit problems.

Global ending stocks for 2013/14 are projected at 107.4 million tons, down less than 0.1 million tons from last month’s forecast but 2 percent larger than a year earlier. These are the largest global ending stocks since 2001/02. China account for the bulk of this month’s downward revision in global ending stocks. India and Thailand account for most of the year-to-year increase in global ending stocks. In contrast, ending stocks are projected to decline in 2013/14 in China, Indonesia, the United States, and Vietnam. The global stocks-to-use ratio for 2013/14 is calculated at 22.6 percent, up slightly from a year earlier.

Export Forecasts for 2014 Raised for India and United States

Total calendar year 2014 global rice trade is forecast at 39.0 million tons, up 0.35 million tons from last month’s forecast and almost 0.7 million tons above this year. Global trade in 2014 and the rest of 2013 will mainly be driven by strong sales to China, Iran, Iraq, and West Africa.

There were three export revisions for 2014 this month. First, India’s export forecast was raised 300,000 tons to 9.3 million based on adequate supplies and expected continued strong sales to Iran. India will be the largest global rice exporter. Second, the U.S. 2014 export forecast was raised 50,000 tons to 3.15 million tons based on larger U.S. supplies. Third, Panama’s import forecast was raised 15,000 tons to 100,000 tons based on smaller production.

There were two import revisions for 2014 this month. First, Iran’s 2014 import forecast was raised 300,000 tons to 1.75 million tons based on expectations of a continued strong pace of sales reported in 2013. Second, the Philippines’ 2014 import forecast was lowered 100,000 tons to 1.1 million based on recommendation from the USDA Office in Manila and a weaker 2013 import forecast.

The 2013 total global rice trade forecast was raised 0.2 million tons to 38.3 million, still 2 percent below the year-earlier record. There were three export revisions for 2013 this month. First, India’s 2013 export forecast was raised 300,000 tons to 10.0 million based on recommendations from the USDA Office in New Delhi and a strong pace of sales to Iran. Second, Argentina’s 2013 export forecast was increased 25,000 tons to 550,000 tons based on a larger crop. These two upward revisions were partially offset by a 100,000-ton reduction in Brazil’s 2013 export forecast to 750,000 tons based on a slower pace of shipments to West Africa.

There were two import revisions for 2013. First, Iran’s 2013 import forecast was raised 300,000 tons to 1.8 million tons based on a stronger than expected pace of purchases from India. And second, the Philippines’ 2013 import forecast was lowered 500,000 tons to 1.0 million tons based on recommendation from the USDA Office in Manila and a much slower than expected delivery pace so far this year.

Thailand’s Export Prices Continue To Decline

Prices for most grades of Thailand’s higher and medium-quality, regular-milled white rice declined 5-8 percent over the past month, mostly a result of lower domestic prices and a depreciation of the Thai baht compared with the U.S. dollar. Prices for parboiled rice have declined even faster, while prices for aromatic rice have declined at a much slower pace. Both parboiled and aromatic rice are specialty rices. Although Thailand’s prices have declined since early August, prices have been nearly stable since early September.

Prices for Thailand's high-quality, 100-percent Grade B (fob vessel, Bangkok) milled rice for export were quoted at $464 per ton for the week ending September 9, down $42 from the week ending August 13. Prices for Thailand’s 5-percent brokens were quoted at $452 per ton for the week ending September 9, down $43 from the week ending August 13. Prices for Thailand's 5-percent parboiled rice were quoted at $463 per ton for the week ending September 9, down $67 from the week ending August 13.

Prices for Thailand’s brokens have declined as well. For the week ending September 9, prices for Thailand’s A-1 Super 100-percent brokens were quoted at $418 per ton, down $22 from the week ending August 13. Price quotes for Thailand’s premium jasmine rice, an aromatic variety, were quoted at $1,120 per ton for the week ending September 9, down $13 from the week ending August 13. All price quotes for Thailand’s rice are from the Weekly Rice Price Update, reported by the USDA office in Bangkok.

Price quotes from Vietnam have also declined over the past month, mostly due to a lack of new buyers except for China. For the week ending September 10, prices for Vietnam’s 5-percent double-water-polished with 5-percent brokens were quoted at $365 per ton, down $30 from August 6. Thailand’s price quotes for 5-percent brokens are currently $87 per ton above quotes for Vietnam’s 5-percent doublewater- polished milled rice, down from about $100 a month earlier.

U.S. prices for long-grain milled rice have increased slightly since early August as U.S. supplies tightened prior to the onset of the 2013/14 harvest in the Delta—the largest source of U.S. long-grain rice. For the week ending September 10, prices for high-quality U.S. Southern long-grain rice (No. 2, 4-percent brokens, bagged, free alongside vessel, U.S. Gulf port) were quoted at $617 per ton, up $11 from the week ending August 6. Prices for U.S. long-grain rough-rice (bulk, fob vessel, New Orleans) were quoted at $390 per ton for the week ending September 9, up $5 from the week ending August 6, despite a slow pace of sales early in the market year.

Prices for California milled rice for the U.S. market have remained unchanged over the past month. California’s package-quality medium-grain rice (bulk) for domestic sales to processors and repackagers was quoted at $661 per ton for the week ending September 9, unchanged since early June. Export prices (sacked, port of Oakland) for California milled rice were reported at $750 per ton for the week ending September 10, also unchanged from early July. Virtually no new-crop U.S. medium- and short-grain rice is available for shipment yet since the 2013/14 harvest has barely started in California. Quotes for Vietnam, U.S. long- and medium-grain milled-rice prices, and U.S. rough-rice export prices are from the weekly Creed Rice Market Report.

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