Arkansas Rice Update 10-15-21

by Jarrod Hardke, Rice Extension Agronomist - October 15, 2021

Arkansas Rice Update 2021-29

October 15, 2021

Jarrod Hardke and Scott Stiles

“It’s the end of the world as we know it, and I feel fine.”

Harvest Progress

Jarrod Hardke

The past couple of weeks have (mostly) been positive for rice harvest progress.  Occasional rain events have slow things periodically, with at least one large rain event thrown in a couple weeks ago to give us issues.  But last week saw a large amount of late rice taken out in areas that may have been lagging behind, so we should be over 90% harvested at this point and begin finishing up some slow maturing and very late planted rice as conditions allow.

It appears fall weather is finally arriving tomorrow – death to mosquitos!  Right now it looks like we have a beautiful, cool, dry week in store for us.  May you have a rut-free harvest week!

Table 1.  Harvest progress by week, 2016-2021.

Fig. 1.  NOAA 7-day precipitation forecast.

Rice Market Update

Scott Stiles

The focal point for the rice market this week was USDA’s monthly WASDE report, released on Tuesday.  Changes to 21/22 long-grain production were relatively minor.  However, there was a slight increase of 0.1 million cwt.  Expected production now stands at 144.3 million cwt.—down almost 16% from last year.  The increase in production came on a relatively small 2 pound per acre bump in average yield to 7,428 pounds.  Yields, based on grower surveys, were increased in Louisiana and California this month.  Texas saw a 300-pound reduction.  No adjustments were made to harvested acreage, which is projected at 1.942 million.

The most noticeable change in U.S. long-grain supply was a 2.0 million cwt. reduction in imports to 28.0 million.  USDA noted higher freight costs and reduced availability of shipping containers could impact rice imports into 2022.

Total domestic and residual use was decreased by 1.0 million cwt to 114.0 million.  There were no changes this month to exports.  Ending stocks were decreased by 0.9 million to a net 23 million cwt.  The season-average farm price for long-grain was unchanged at $13 per cwt. or $5.85 per bushel.

While there was some tightening in long-grain ending stocks this month, CBOT rice futures closed 7 ½ cents lower following the October WASDE.  However, the November contract quickly retraced Tuesday’s loss, adding a combined 16 ½ cents over the next two sessions, closing at $13.87 on Thursday.  Trading Friday morning was 4 to 6 cents higher.  Around eastern Arkansas, cash rough rice bids at mills were $6.09/bu. early Friday.  Bids at driers were in the $5.95 to $6.02 per bushel range.

Open interest is quickly evaporating in November rice futures, as over 1,500 contracts have been liquidated since last Friday.  Looking ahead, January ‘22 rice futures currently trade at $14.16/cwt.  The March, May and July ‘22 contracts all trade above $14 as well, with about 10 cents of carry between each contract from January to July.  Carrying-charge markets try to provide an incentive to store a crop.  This could also be a signal of slowing demand.  Cumulative long-grain export sales are starting to lag last year’s pace.  USDA anticipates more export competition from South America in the 21/22 marketing year.  Like here in the U.S., input costs are a top concern in Brazil as well.  A Bloomberg article released Thursday mentions Brazil spot prices for phosphate fertilizers have more than doubled over the past year.  Potash and urea have tripled.  In addition to the sharp price increases, there’s concern about delivery/availability.

Article:  Fertilizer Price Shock Threatens Crop of World's Key Corn Supplier

2020 PLC Payments

There were no adjustments this month to the old crop (20/21) long-grain or medium grain balance sheets.  The season average price outlooks for both classes remain at $12.60/cwt. ($5.67/bu.) for long-grain and $13/cwt. ($5.85/bu.) for southern medium grain.  This would equate to 2020 Price Loss Coverage (PLC) payments of 63 cents per bushel for long-grain and 45 cents per bushel for southern medium grain.  These payment rates do not include sequestration.  USDA is expected to release the final 2020 marketing year average prices on October 29^th.

The table below includes the final 2020 PLC payment rates for wheat, peanuts and seed cotton.  Projected payment rates for long-grain and medium grain are included as well.

Crop Progress:

As of October 10^th, eighty-one (81) percent of the U.S. and Arkansas rice acreage was harvested.  Arkansas’ harvest progress is on par with last year but lags 9 percentage points behind the five-year average.  Harvest has wrapped up in Texas and Louisiana.  California and Missouri were approaching 70% harvested as of last Sunday.  Record yields are projected for both of those states this year—8,900 and 8,000 lbs. per acre respectively.

Additional Information

Arkansas Rice Updates are published periodically to provide timely information and recommendations for rice production in Arkansas.  If you would like to be added to this email list, please send your request to rice@uada.edu.

This information will also be posted to the Arkansas Row Crops blog (http://www.arkansas-crops.com/) where additional information from Extension specialists can be found.

More information on rice production, including access to all publications and reports, can be found at http://www.uaex.uada.edu/rice.

Acknowledgements

We sincerely appreciate the support for this publication provided by the rice farmers of Arkansas and administered by the Arkansas Rice Research and Promotion Board.

The authors greatly appreciate the feedback and contributions of all growers, county agents, consultants, and rice industry stakeholders.