Agricultural and Food Policy
 Agri Outlook
Radio
Number 102
Arkansas’ Rice Situation and Outlook, Presented 2007 USA National Rice Outlook Conference, Orlando Florida – December 2-4, 2007 by Bobby Coats – Professor & Extension Economist, University of Arkansas Division of Agriculture (3:54 minutes)
Audio/Video Script:
Dr. Bobby Coats
Extension Economist
University of Arkansas, Division of Agriculture
This is Part 2 of Arkansas’ 2008 Rice Situation and Outlook. I’m Bobby Coats
Extension Economist University of Arkansas Division of Agriculture.
Slide 1 – Turning now to rice price strength and trend for the 2007
and 2008 marketing periods. First, we will take a quick review of some key
background data.
Slide 2 [Bar Chart] – World rice milled consumption has exceeded world
rice production in 6 of the previous 7 years. A longer view shows that world
rice milled consumption has exceeded world rice production in 9 of the previous
17 years.
Slide 3 [Bar Chart] - World rice trade remains strong at record levels
at an estimated 29.6 million metric tons.
Slide 4 [Line Graph] – Problematic is the fact U.S. rice export prices
continue to exceed our Thai and Vietnamese competitors.
Slide 5 [Bar Chart] - World rice ending stocks continue to decline and
remain dangerously low at 74.1 million cwt.
Slide 6 [Line Graph] – This is a slide of
the weekly wheat futures. First the trend in domestic and global growth remains
up. This trend plus inflationary expectations is bullish for commodities. Thus,
given the global economic setting and continued bullish fundamentals for wheat
the price trend remains up.
Slide 7 [Line Graph] – This is a monthly wheat chart. Note wheat’s
previous high in the $7.50 per bushel area and now note wheat’s current price
level. At what point does wheat top?
Slide 8[Line Graph] – This is a slide of the weekly corn futures. The
weekly price trend in the corn futures remains up.
Slide 9 [Line Graph] – This is a monthly corn futures chart. Assumed
global bullishness for commodities coupled with underlying corn fundamental
strength, could have corn prices continuing to move toward the previous 1996
high.
Slide 10 [Line Graph] – This is a weekly soybean futures chart.
Soybean prices remain strong and the trend remains up. The potential exists for
the global economic setting to show some significant weakness in the immediate
future due to an array of issues with one of the issues being the sub-prime
resets. If this economic weakness occurs will soybean and grain prices suffer?
Slide 11 [Line Graph] – This is a monthly soybean futures chart. Note
that soybean prices have exceeded their previous highs except for 1973.
Presently, I still favor soybean and corn prices moving higher as they bid
against one another for acreage. These markets are extremely volatile,
sophisticated and complex which is to say enter only with professional
assistance.
Slide 12 [Line Graph] – This is a weekly rice futures chart. Rice
prices continue to show strength and the trend remains up. Rice prices must
remain strong or expected higher soybean and feed grain prices coupled with
strong wheat prices will erode rice acreage.
Slide 13 [Line Graph] – This is a monthly rice futures chart. No
question current price strength exists but with country after country around the
world very protectionistic of their rice industry for a number of reasons, can
rice prices possibly show the price strength of wheat without some catastrophic
global weather event? Commercial rice interests are more bearish than bullish
about significant price advances from current levels but large sums of
investment liquidity in a thinly traded market could cause a major advance.
This has been Bobby Coats Extension Economist University of Arkansas Division
of Agriculture.
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