Agricultural and Food Policy
 Agri Outlook
Radio
Number 82
Outlook: Rice Outlook (4:10 minutes)
Audio/Video Script:
Dr. Bobby Coats
Extension Economist
University of Arkansas, Division of Agriculture
U.S. long grain ending stocks are estimated at 15.8 million cwt significantly
below the previous marketing periods 28.5 million cwt. I’m Bobby Coats
Extension Economist University of Arkansas Division of Agriculture.
USDA’s September rice projections indicated the following:
- USDA reduced 2007 U.S. long grain rice production
from 140 million cwt to 138 million cwt. This is the lowest U.S. long
grain production since 2000, but still the 9th largest on record.
- Total long grain supply was lowered from 185.6
million cwt to 181.8 million cwt. which is the lowest since 2003, but still
the sixth largest on record.
- U.S. long grain exports were lowered from 79
million cwt to 77 million cwt, which is above the last marketing periods
73 million cwt and the sixth largest on record.
- U.S. long grain total use is projected at 166
million cwt the 4th largest on record and above last years 164.6 million
cwt.
- U.S. long grain ending stocks are estimated at
15.8 million cwt significantly below the previous marketing periods 28.5
million cwt. and more in line with a normal ending stocks expectation.
Turning to the price outlook for long grain rice, first the U.S. Federal
Reserve signaled with their recent rate cut their acknowledgment economic growth
presents a problem and their intent to contribute to sustaining U.S. and global
growth. Yes, inflation remains a concern for the Federal Reserve and yes, there is much speculation
about the future strength or weakness in the dollar. The point is that global
economic momentum remains strong and so does the demand for most commodities
including the food and fiber commodities. The Fed’s move continues bullish for
the market.
This week, the week of October 2, will be interesting to study. Presently,
the price trend in wheat, soybeans, corn, cotton, and rice remains up. Things to
consider include at what point does wheat put in a top; will soybeans correct
before continuing higher? Corn gives every indication of price strength. Cotton
continues to show price strength making one wonder how many cotton acres will
return back to cotton production next year especially in Arkansas and the Delta
region. Both cotton and rice are extremely expensive crops to produce, so
producers will be seeking pricing opportunities that will allow their operations
to cash flow. Few analysts truly appreciate the cost increases our producers
have experienced since 2002.
As for rice, my expectation is the Chicago futures price will continue in
step with the other grains and soybean prices. U.S. producers continue to remain
at a significant disadvantage in the milled rice export market.
Commodities continue to display a significant amount of price volatility and
uncertainty, due to the dynamics of the global economic setting; therefore I
continue to believe professional marketing assistance is advisable from co-ops
or individual marketing professionals.
This has been Bobby Coats Extension Economist University of Arkansas Division
of Agriculture.
Source: Rice Graphics and Commentary
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