Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Rice Futures Post a Weekly Gain on Weak Output, Boost in Demand

December 20, 2019 at 18:32 by Andrew Moran

Rice futures are trading slightly higher at the end of the trading week, driven by weaker output by some of the world’s biggest producers. For the rice industry, farmers have noticed a boost in demand, which could lead to a minimal deficit in global markets over the next two years.

January rough rice futures rose $0.055, or 0.43%, to $12.85 per ton at 17:06 GMT on Friday on the Chicago Board of Trade (CBoT). Rice prices reported a weekly gain of 3.4%, lifting their year-to-date gains to just under 19%.

Supply and demand issues seem to be driving rice’s direction this year. In May, the USA Rice World Market Price (WMP) Subcommittee concluded that many regions would see their total plantings and production would be lower than the US Department of Agriculture (USDA)’s projections, which were already conservative to begin with. But the rest of the world is not taking advantage of the decline in US output.

India, one of the planet’s largest producers, is reporting non-basmati rice volumes fell sharply to 2.81 million tons, compared to 4.48 million tons in the same time last year. At the same time, shipments slipped 37% to $1.14 billion. Basmati rice also witnessed exports slide 10%. This comes as the government reported a 42% year-on-year plunge in exports in October.

But it is not just India enduring the same trends.

Thailand has seen its exports tumble in recent months, and experts are attributing the declines to a higher baht and rising local prices. This year, the baht gained approximately 6% against the US dollar. Farmers are hoping that a fresh crop will attract buyers next year.

Buyers have been turning to the Philippines as of late, but local suppliers have been unable to keep up with the demand. Bangladesh has the opposite problem: Higher output but low demand.

In other agricultural commodities, February corn futures added $0.01, or 0.26%, to $3.875 per pound. February wheat futures slipped $0.0475, or 0.87%, to $5.405 a bushel. February soybean futures soared $0.0475, or 0.51%, to $9.2925 per bushel.

If you have any questions and comments on the commodities today, use the form below to reply.

Leave a Reply