USDA’s Rice Stocks report on March 31 trickled down into the April 9 supply/demand estimates, resulting in a 1.5 million cwt. increase in projected 20014/15 ending stocks to 42.4 million. That is a huge 33% increase from last year. Long-grain ending stocks are increased 0.5 million to 27.6 million, and combined medium- and short-grain ending stocks are increased 1.0 million to 12.5 million.
March 1 rice stocks, at 120.8 million cwt., were higher than expected and above trade expectations. that is up 24% from last year and the highest since 2011. Implied all rice domestic and residual use for the December-February quarter was down 8% the previous market year and 5% below the previous 4-year average.
As a result, USDA economists reduced total 2014/15 use by 1.0 million cwt. to 234.0 million. The net reduction was in medium- and short-grain rice. Domestic use of long-grain was reduced reduced 1 million cwt., but a similar increase in exports was offsetting. USDA now sees U.S. exports at 4.76 million tons, up about 12% from last year.
A bump in all rice imports of 0.5 million (all long-grain) to 23.5 million on Census data showing strong imports from Thailand in February also contributed to the increase in ending stocks.
The midpoint 2014/15 long-grain season-average price was dropped 20 cents to $12.30/cwt, - down $3.10/cwt. from last year. However, USDA raised its forecast for combined medium- and short-grain rice to $18.60/cwt.. That is 60 cents per cwt. below a year ago. The all rice price midpoint is $14.20, down a dime from the March estimate and $2.10/cwt. below last year.
Global 2014/15 rice ending stocks were increased 0.9 million tons. Global consumption (including residual) is lowered nearly 0.65 million tons on reduced projected use in Indonesia, Japan and the United States, partially offset by increases for Pakistan and Thailand.
Global rice supplies in 2014/15 are increased 0.3 million tons due to an increase in beginning stocks ( 0.6 million) more than offsetting a reduction in production (-0.3 million). The rise in global beginning stocks primarily to increases for Japan, Pakistan, and Taiwan, while the reduction in global 2014/15 rice production results mainly from decreases for Indonesia, Vietnam and Sub-Saharan Africa, partially offset by an increase for Pakistan.
Global rice exports for 2014/15 are lowered slightly due to reductions for Egypt, Japan, and Pakistan, partially offset by increases for Brazil and the United States. Imports are lowered slightly for Sub- Saharan Africa and the Middle East, but raised for the United States.
The U.S. 4% broken rice price is about $485/ton, unchanged from a month ago, but $100/ton less than a year ago. According to Oryza, Vietnam is the low-cost seller, at $365/ton, down $20?ton from last year. Notice in the table below that South American prices are even higher than U.S. prices.
Thailand is the only country showing an increase in price over a year ago: That is because the second crop there is seen falling more than 40%, leading to overall paddy rice production for 2014/15 of 32.6 million metric tons, down 11% from last year. Indian second-crop planting is a bit more than 10 million acres, a reduction of about 7% from last year’s 10.76 million.
2015 Crop Progress, Prospects
U.S. planting as of April 5 had reached 14% of intended acres, slightly lagging the 18% five-year average. Louisiana farmers have the post planted, at 63%, against a five-year average of 56%. Texas is 21% complete; average is 47%. At 3%, emergence was one percentage point behind average, with Louisiana at 17%, the only reported state with any emerged, and well ahead of its usual 11% for this time of year.
In its February Outlook, USDA expected U.S. rice planted acreage and production in 2015 to change little from last year, although it projected southern states would reduce long-grain area and expand medium- and short-grain acreage. “Medium- and short-grain area in California is likely to stay nearly unchanged from last year due to the expected continuation of the drought. Total use is projected slightly higher as rice exports more than offset reduced domestic and residual use. All-rice ending stocks are projected to reach the highest level in 5 years with most of the increase coming from long grain. The all-rice price is projected lower with weaker long-grain prices partly offset by continued strong medium and short-grain prices.” The Outlook projected the season average price at $13/cwt.
The Prospective Plantings report confirmed the acreage piece of the puzzle, with a reduction of just 1% seen despite lower prices. Farmers reported 2.915 million acres intended in 2015, down from 2.939 last year. Thus, until the monthly 2015 supply/demand estimates begin, and until the June Planted Acreage report is issued, the February estimates are a good starting point for looking ahead.