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USDA Rice Outlook


15 August 2012

USDA Rice Outlook - August 2012USDA Rice Outlook - August 2012

There were several revisions this month to the 2012/13 U.S. supply and use projections. On the supply side, total production was lowered 1.0 million cwt to 190.0 million based on a slightly weaker yield. Imports were lowered 0.5 million cwt to 21.0 million cwt based on a slower pace reported in 2011/12. Finally, the 2012/13 carryin was lowered 1.0 million cwt to 33.5 million cwt due to a stronger 2011/12 export forecast.
USDA Rice Outlook

U.S. 2012/13 Crop Forecast Lowered 1.0 Million Cwt to 190.0 Million Cwt

On the 2012/13 use side, total domestic and residual use was lowered 2.0 million cwt to 124.0 million, while exports remain forecast at 92.0 million cwt. On balance these revisions resulted in a 0.5 million-cwt reduction in the 2012/13 ending stocks estimate to 28.4 million cwt.

The 2012/13 season-average farm price (SAFP) for U.S. long-grain rice was raised 50 cents per cwt on both the high and low ends this month to $13.50-$14.50 per cwt, largely based on smaller U.S. supplies and higher prices for other grains and oilseeds. The combined medium- and short-grain 2012/13 U.S. SAFP remains forecast at $15.50- $16.50 per cwt, compared with $15.70 a year earlier.

The 2012/13 global production forecast was lowered 1.9 million tons to 463.2 million tons, with crop forecasts lowered for Brazil, India, North Korea, and United States. In contrast, production estimates for China and South Korea were raised this month. The 2012/13 global disappearance forecast was lowered 0.4 million tons to 466.4 million tons, with Brazil and India accounting for most of the reduction. The weaker production forecast was largely responsible for a 0.7 million ton reduction in the 2012/13 global ending stocks forecast to 101.8 million tons.

Global calendar year 2013 trade is forecast at 35.5 million tons, down 0.3 million from last month’s forecast, with Brazil’s export forecast lowered. The 2012 global trade forecast was raised 200,000 tons to 35.65 million tons, with export forecasts raised for Brazil, Paraguay, and the United States.

Prices for most grades of Thailand’s non-aromatic specialty and white milled-rice declined over the past month, largely due to a lack of new inquiries from buyers and expectations that the Government will release some of its intervention stocks latter this year. In contrast, price quotes from Vietnam have increased over the past month, mostly due to expected large purchases from Indonesia and robust shipments to West Africa. U.S. milled rice prices have increased over the past month as well, partly due to stronger prices for other grains caused by the U.S. drought.

Domestic Outlook

U.S. 2012/13 Crop Forecast Lowered 1.0 Million Cwt to 190.0 Million Cwt

The 2012/13 U.S. rice crop is forecast at 190.0 million cwt, down 1.0 million cwt from last month’s forecast, but still nearly 3 percent larger than a year earlier. This month’s downward revision was the result of a slightly lower yield forecast. At 7,196 pounds per acre, the average field yield is 39 pounds below last month’s forecast, but almost 2 percent above a year earlier and the second highest on record. Planted area remains estimated at 2.66 million acres, 1 percent below a year earlier and the smallest area since 1986/87. The year-to-year area decline is largely due to more favorable returns for alternative crops, especially corn and soybeans in the Delta.

Long-grain rice production is projected at 132.1 million cwt, down 1.4 million cwt from last month’s forecast, but more than 13 percent larger than a year earlier. Combined medium- and short-grain production is projected at 57.9 million cwt, up 0.4 million cwt from last month’s forecast, but still nearly 16 percent below the near-record a year earlier.

Harvested area is estimated lower in all reported States in 2012/13 except Arkansas and Missouri. Texas accounts for the bulk of the area decline. At 113,000 acres, harvested area in Texas is 37 percent below a year earlier and the lowest in more than a century. The State has suffered from severe drought and instituted water restrictions this year. California’s 2012/13 harvested area is estimated at 555,000 acres, down 4 percent from last year. At 133,000 acres, Mississippi’s harvested area is 16 percent below a year earlier and the lowest since 1977/78. Louisiana’s rice harvested area dropped almost 6 percent from 2011/12 to 395,000 acres, the smallest since 2007/08. In contrast, harvested rice acreage in Arkansas rose almost 5 percent to almost 1.25 million acres. Harvested rice acreage in Missouri increased 56 percent to 199,000 acres.

Average field yields are estimated higher in all reported States except Mississippi, with yields record high in Texas and Louisiana. At 6,980 pounds per acre, the average field yield in Arkansas is up 3 percent from a year earlier and the second highest on record. In Missouri, the average yield is estimated at 6,700 pounds per acre, also up 3 percent from last year. Yields in both Delta States were reduced last year by early season flooding and severe heat at critical growth stages. Mississippi’s average yield of 6,700 pounds per acre is 2 percent below a year earlier. Louisiana’s average field yield is estimated at a record 6,400 pounds per acre, up 1 percent from a year earlier. The average Texas field yield of 7,900 pounds is up 10 percent from a year earlier and the highest ever reported for a southern State. In California, average field yields are estimated at 8,400 pounds per acre, up fractionally from a year earlier, but still 200 pounds below the 2009/10 record.

Arkansas and Missouri account for all of the expected increase in U.S. rice production in 2012/13. At 86.9 million cwt, rice production in Arkansas is up 11 percent from a year earlier, a result of both expanded area and a higher yield. Missouri’s production of 13.3 million cwt is up 61 percent from a year earlier, mostly due to much larger plantings. In contrast, Louisiana’s rice crop of 46.6 million cwt is 4 percent below last year, a result of smaller plantings. At 8.9 million cwt, the Texas 2012/13 rice crop is 31 percent below a year earlier and the smallest since 1946/47. Mississippi’s production of 8.9 million cwt is 18 percent below a year earlier, mostly due to smaller plantings. California’s production is projected to decline nearly 4 percent from last year to 46.6 million cwt due to smaller plantings.

Harvest Pace Is Well Ahead of Normal On the Gulf Coast

Progress of the 2012/13 U.S. crop remains well ahead of normal in California and in the South. By August 5, 76 percent of the U.S. rice crop had headed, up from 53 percent a year earlier and the U.S. 5-year average of 57 percent. In Arkansas, 91 percent of the crop had headed by August 5, about 36 percentage points ahead of both last year and the State’s 5-year average. Missouri’s crop was reported 64 percent headed by August 5, compared with a 5-year average of 41 percent. In Mississippi, 87 percent of the crop was reported headed by August 5, up 10 percentage points from its 5-year average.

In Louisiana, 97 percent of the crop was reported headed by August 5, up 6-7 percentage points from last year and the State’s 5-year average of 48 percent. With 91 percent of the crop headed by August 5, Texas crop progress was slightly behind last year, but nearly even with the State’s 5-year average. In California, 35 percent of the crop had headed by August 5, well ahead of both 10 percent last year and the State’s 5- year average of 22 percent.

Harvest of the 2012/13 crop has begun in the South, with 7 percent of the total U.S. crop reported harvested by August 5, up from 5 percent last year and the U.S. 5-year average of 3 percent. In Louisiana, 34 percent of the crop was reported harvested by August 5, up about 20 percentage points from both last year and the State’s 5-year average. The Texas 2012/13 crop was 15 percent harvested by August 5, even with the State’s 5-year average, but well behind last year’s pace due to rain in the second half of July. In Mississippi, 1 percent of the 2012/13 crop was reported harvested by August 5. Harvest began about 2 weeks earlier than normal in the State this year. Harvest of the 2012/13 crop has not begun in other States.

Total Supply Forecast for 2012/13 Lowered 2.5 Million Cwt to 244.4 Million Cwt

The total supply forecast for 2012/13 was lowered 2.5 million cwt to 244.4 million cwt, with estimates for carryin, production, and imports all revised down this month. Total supply is almost 4 percent below a year earlier and the lowest since 2003/04. By class, long-grain supplies are projected at 168.1 million cwt, down 2.9 million cwt from last month’s forecast and almost 1 percent below a year earlier. Medium- and short-grain supplies are forecast at 73.6 million cwt, an increase of 0.4 million cwt from last month’s forecast, but still 9 percent below a year earlier.

The 2012/13 all rice carryin forecast was lowered 1.0 million cwt to 33.5 million cwt, 31 percent below a year earlier. The downward revision was the result of a higher longgrain export estimate for 2011/12. The long-grain 2012/13 carryin was lowered 1.0 million cwt to 17.6 million, 51 percent below a year earlier. The medium- and shortgrain carryin remains forecast at 13.2 million cwt, up 31 percent from a year earlier.

Stocks of brokens, included in the all-rice stocks estimate, are not classified by class. Total all rice imports for 2012/13 are projected at 21.0 million cwt, down 0.5 million from last month’s forecast, but still up 5 percent from a year earlier. The downward revision was based on expectations of a continuation of the slower pace of shipments observed in 2011/12. Long-grain imports are projected at 18.5 million cwt, down 0.5 million cwt from last month, but up almost 6 percent from a year earlier. Thailand supplies the bulk of U.S. long-grain imports, mainly shipping its premium jasmine rice, an aromatic.

Basmati rice from India and Pakistan accounts for most of the remaining U.S. long-grain imports. Medium- and short-grain imports remain projected at 2.5 million cwt for 2012/13, unchanged from a year earlier. Specialty rice from Thailand that is classified as medium- and short-grain accounts for the bulk of U.S. medium- and short-grain imports. Arborio rice from Italy accounts for most of the remainder.

U.S. 2012/13 Domestic and Residual Use Forecast Lowered 2.0 Million Cwt to 124.0 Million Cwt

Total use of U.S. rice in 2012/13 is projected at 216.0 million cwt, down 2.0 million cwt from last month’s forecast and 2 percent below a year earlier. By class, long-grain total use is projected at 152.0 million cwt, down 2.0 million cwt from last month’s forecast, but unchanged from a year earlier. Medium- and short-grain total use remains projected at 64.0 million cwt, 6 percent below a year earlier.

Total domestic and residual use of all-rice in 2012/13 is projected at 124.0 million cwt, down 2.0 million cwt from last month’s forecast, but 5 percent higher than a year earlier. This month’s downward revision in the 2012/13 domestic and residual use estimate is largely based on smaller U.S. supplies. For long-grain, 2012/13 domestic and residual use is projected at 92.0 million cwt, down 2.0 million cwt from last month’s forecast, but 8 percent larger than a year earlier. Medium- and short-grain domestic and residual use remains projected at 32.0 million cwt, down 1.0 million cwt from a year earlier.

Total exports of U.S. rice in 2012/13 remain projected at 92.0 million cwt, 10 percent below the year-earlier revised level. The year-to-year decline is based on smaller U.S. supplies and less competitive prices in global markets. By type, U.S. rough-rice exports are projected at 33 million cwt, up 1.0 million cwt from last month’s forecast, but unchanged from a year earlier. Latin America is expected to remain the largest market for U.S. rough-rice exports, with Mexico the biggest buyer. Milled rice exports (combined milled- and brown-rice exports converted to a rough-basis) are projected at 59.0 million cwt, down 1.0 million cwt from last month’s forecast and 14 percent below a year earlier.

By class, long-grain exports remain projected at 60.0 million cwt, more than 10 percent below the year-earlier revised level. These are the smallest U.S. long-grain exports since 1996/97. Medium- and short-grain exports remain projected at 32.0 million cwt, 9 percent below the year-earlier record. Some of the projected year-to-year decline is based on weaker U.S. shipments to Northeast Asia due to the timing of the region’s annual WTO imports, with U.S. shipments to the region abnormally high in 2011/12. U.S. ending stocks of all-rice in 2012/13 are projected at 28.4 million cwt, down 0.5 million cwt from last month’s forecast and 15 percent below a year earlier. These are the smallest ending stocks since 2003/04. The stocks-to-use ratio is calculated at 13.2 percent, down from 15.2 percent in 2011/12.

By class, the 2012/13 U.S. long-grain carryout is projected at 16.1 million cwt, down 0.9 million cwt from last month’s forecast and 8 percent below a year earlier. The longgrain stocks-to-use ratio is calculated at 10.6 percent, down from 11.6 percent a year earlier and the lowest since 2003/04. The medium- and short-grain carryout is projected at 9.6 million cwt, up 0.4 million cwt from last month’s forecast, but 27 percent below a year earlier. The medium/short-grain stocks-to-use ratio is calculated at 15.0 percent, down from 19.4 percent in 2011/12.

There were no supply side revisions to the 2011/12 balance sheet this month. On the use side, the 2011/12 total export forecast was raised 1.0 million cwt to 102.0 million based on Census shipment data through June and shipment data from the U.S. Export Sales report through July. Long-grain milled rice accounted for all of the upward revision in exports. The higher export forecast lowered 2011/12 total ending stocks 1.0 million cwt to 33.5 million, with long-grain accounting for all of the reduction in the ending stocks estimate.

U.S. 2012/13 Season-Average Price Forecast Raised for Long-Grain Rice

The 2012/13 season-average farm price (SAFP) for U.S. long-grain rice was raised 50 cents per cwt on both the high and low ends this month to $13.50-$14.50 per cwt, compared with $13.40 per cwt a year earlier. The upward revision was based on smaller U.S. supplies and higher prices for other grains and oilseeds. The combined medium- and short-grain 2012/13 U.S. SAFP remains forecast at $15.50-$16.50 per cwt, compared with $15.70 a year earlier.

In late July, NASS reported a mid-July U.S. long-grain rough-rice price of $13.70 per cwt, up 30 cents from the revised June estimate. The June price was raised 10 cents from the mid-month estimate to $13.40. For combined medium- and short-grain rice, the mid-July NASS price was reported at $17.30 per cwt, up $1.60 from the revised June price. The June medium- and short-grain rough-rice cash price estimate was raised $0.30 to $15.70 per cwt.

International Rice Market

India’s 2012/13 Production Forecast Lowered 2.0 Million Tons to 98.0 Million Tons

Global rice production for 2012/13 is forecast at 463.2 million tons (milled basis), down 1.9 million tons from last month’s forecast and 1.8 million tons below a year earlier. This month’s downward revision is largely due to a smaller global area forecast. At 158.8 million hectares, global rice area is 1.2 million hectares below last month’s forecast, with India and Brazil accounting for most of the downward revision in global rice area. Global area is virtually unchanged from a year earlier. The average yield remains forecast at 4.35 tons per hectare, fractionally below the year earlier record.

India accounts for the bulk of this month’s downward revision in global production. India’s 2012/13 crop was lowered 2.0 million tons to 98.0 million tons due to a delayed, deficient, and poorly distributed monsoon rainfall that has reduced area and yield potential for growers dependent on the seasonal rains. The forecasted crop is 6 percent below the year earlier record. India’s 2012/13 total rice area was lowered 1.0 million hectares to 43.0 million hectares, a drop of 1.4 million hectares from a year earlier. At 3.42 tons per hectare, the average yield is down 3 percent from last year.

Despite the smaller crop, India is projected to have adequate supplies of rice for both its domestic market and global buyers. Elsewhere in Asia, North Korea’s 2012/13 production was lowered 100,000 tons to 1.5 million tons based on severe drought in May and June that was followed by heavy rains and flooding in July. Outside Asia, Brazil’s 2012/13 production was lowered 850,000 tons to 7.82 million based on a much lower area estimate recommended by the U.S. Agricultural Counselor in Brasilia. At 2.4 million hectares, Brazil’s rice area is 350,000 hectares below a year earlier and the lowest in more than a half a century. Finally, the U.S. 2012/13 crop forecast was lowered 1 percent to 6.05 million tons based on a weaker yield reported by the U.S. Department of Agriculture’s National Agricultural Statistics Service. The southern United States—where the bulk of the U.S. crop is grown—has experienced an extremely hot summer.

These downward revisions were partially offset by several increases. First, China’s 2012/13 crop was raised 1.0 million tons to a record 142.0 million tons based on slightly higher area and yield estimates. Weather has generally been favorable in China for rice production this year. South Korea’s 2012/13 production was raised 100,000 tons to 4.3 million based on a higher area forecast recommended by the U.S. Agricultural Counselor in Seoul. This is the first year-to-year area increase for South Korea since 2001/02. Finally, Mexico’s 2012/13 production forecast was raised 25,000 tons to 153,000 tons based on a larger area estimate recommended by the U.S. Agricultural Counselor in Mexico City. At 45,000 hectares, rice area in Mexico is the highest since 2009/10.

Despite the downward revision in production, global rice supplies are expected to be plentiful in 2012/13. Record crops are projected for four Asian exporters—Cambodia, China, Thailand, and Vietnam—and a near-record crop is projected for Pakistan. Among the non-Asian exporters, Australia, Egypt, and the United States are project to harvest larger crops in 2012/13 than in 2011/12.

Global production for 2011/12 is estimated at a record 465.0 million tons, up 1.1 million tons from last month’s estimate and 3.5 percent above a year earlier. India accounted for the bulk of this month’s upward revision in 2011/12 production. India’s 2011/12 crop was raised 920,000 tons to a record 104.32 million tons based on the Government of India’s Fourth Advance Estimate. Indonesia’s 2011/12 crop was raised 200,000 tons to 36.5 million based on a slightly higher harvested area for its third crop. These upward revisions were partly offset by a 40,000-ton reduction in Brazil’s 2011/12 production forecast to 7.82 million tons based on a smaller yield reported by the Government of Brazil.

Global disappearance for 2012/13 is projected at a record 466.4 million tons, down 0.4 million from last month’s forecast, but almost 2 percent larger than a year earlier. Consumption forecasts were raised this month for China and Indonesia, but lowered for Brazil and India.

On a year-to-year basis, Bangladesh, Burma, China, India, Indonesia, Thailand, the United States, and Vietnam account for most of the expected increase in global domestic use. Global ending stocks for 2012/13 are projected at 101.8 million tons, down 0.7 million tons from last month and 3.2 million tons below a year earlier, with India and Brazil accounting for most of this month’s downward revision. The global stocks-to-use ratio for 2012/13 is calculated at 21.8 percent, down from 22.9 percent a year earlier.Despite the downward revision in production, global rice supplies are expected to be plentiful in 2012/13. Record crops are projected for four Asian exporters—Cambodia, China, Thailand, and Vietnam—and a near-record crop is projected for Pakistan.

Among the non-Asian exporters, Australia, Egypt, and the United States are project to harvest larger crops in 2012/13 than in 2011/12. Global production for 2011/12 is estimated at a record 465.0 million tons, up 1.1 million tons from last month’s estimate and 3.5 percent above a year earlier. India accounted for the bulk of this month’s upward revision in 2011/12 production. India’s 2011/12 crop was raised 920,000 tons to a record 104.32 million tons based on the Government of India’s Fourth Advance Estimate. Indonesia’s 2011/12 crop was raised 200,000 tons to 36.5 million based on a slightly higher harvested area for its third crop. These upward revisions were partly offset by a 40,000-ton reduction in Brazil’s 2011/12 production forecast to 7.82 million tons based on a smaller yield reported by the Government of Brazil.

Global disappearance for 2012/13 is projected at a record 466.4 million tons, down 0.4 million from last month’s forecast, but almost 2 percent larger than a year earlier. Consumption forecasts were raised this month for China and Indonesia, but lowered for Brazil and India.

On a year-to-year basis, Bangladesh, Burma, China, India, Indonesia, Thailand, the United States, and Vietnam account for most of the expected increase in global domestic use. Global ending stocks for 2012/13 are projected at 101.8 million tons, down 0.7 million tons from last month and 3.2 million tons below a year earlier, with India and Brazil accounting for most of this month’s downward revision. The global stocks-to-use ratio for 2012/13 is calculated at 21.8 percent, down from 22.9 percent a year earlier.

Brazil’s 2013 Export Forecast Lowered; U.S. 2012 Export Forecast Raised

Global calendar year 2013 trade is forecast at 35.5 million tons, down 0.3 million from last month’s forecast and fractionally below a year earlier. There was only one 2013 export revision this month. Brazil’s 2013 export forecast was lowered 300,000 tons to 600,000 tons based on much tighter supplies. There were two 2013 import revisions this month. First, Brazil’s imports were raised 90,000 tons to 700,000 tons, also due to a smaller crop. And second, Mexico’s 2013 import forecast was lowered 50,000 tons to 750,000 tons based on a larger crop.

The 2012 global trade forecast was raised 200,000 tons to 35.65 million tons, still almost 2 percent below the year-earlier record. There were three export revisions this month, all in the Western Hemisphere. First, Brazil’s 2012 exports were raised 100,000 tons to 1.0 million tons based on expectations of a continued strong pace of shipments to date. Despite the upward revision, Brazil’s exports are still 0.3 million tons below the year-earlier record. Second, Paraguay’s 2012 exports were raised 50,000 to 200,000 tons, fractionally below the year-earlier record. The increase is based on a faster-thanexpected shipment pace to date. And third, the U.S. 2012 export forecast was raised 50,000 tons to 3.5 million tons based on a stronger-than-expected pace of shipments and sales through July. The only 2012 import revision this month was a 20,000-ton reduction in Mexico’s imports to 730,000 tons based on larger production.

Thailand’s Prices Continue To Decline, U.S. and Vietnam’s Prices Strengthen

Prices for most grades of Thailand’s non-aromatic specialty and white milled-rice declined over the past month largely due to a lack of new inquires from buyers and expectations that the Government will release some of its intervention stocks in the second half of the year. Prices for Thailand's high-quality, 100-percent Grade B (fob vessel, Bangkok) milled rice for export were quoted at $571 per ton for the week ending August 6, down $30 from the week ending July 9 and the lowest since mid-May. Prices for Thailand’s 5-percent brokens were quoted at $560 per ton for the week ending August 6, down $31 from the week ending July 9.

Prices for Thailand's 5-percent parboiled rice—a specialty rice—were quoted at $565 per ton for the week ending August 6, down $31 from the week ending July 9. Prices for Thailand’s brokens have decreased over the past month as well. For the week ending August 6, prices for Thailand’s A-1 Super 100-percent brokens were quoted at $510 per ton, down $15 from the week ending July 9. In contrast, price quotes for Thailand’s premium jasmine rice—an aromatic—were quoted at $1,038 per ton for the week ending August 6, up $4 from the week ending July 9. All price quotes for Thailand’s rice are from the Weekly Rice Price Update, reported by the U.S. Agricultural Counselor in Bangkok.

In contrast, price quotes from Vietnam have increased over the past month, mostly due to expected large purchases from Indonesia and robust shipments to West Africa. For the week ending August 7, prices for Vietnam’s 5-percent double-water-polished with 5- percent brokens were quoted at $425 per ton—up $15 per ton from the week ending July 10. Thailand’s price quotes for 5 percent brokens are currently $136 per ton above quotes for Vietnam’s 5-percent double-water-polished milled rice, compared with a difference of $182 for the week ending July 10.

U.S. prices have increased over the past month as well, partly due to stronger prices for other grains caused by the U.S. drought. For the week ending August 7, prices for highquality Southern long-grain rice (No. 2, 4-percent brokens, bagged, free alongside vessel, U.S. Gulf port) were quoted at $568 per ton, up $6 from July 10. U.S. long-grain rough-rice (bulk, fob vessel, New Orleans) was quoted at $365 per ton for the week ending August 7, up $20 per ton from the week ending July 10.

Prices for California rice for the domestic market have also increased over the past month. California’s package-quality medium-grain rice (sacked) for domestic sales was quoted at $805 per ton for the week ending August 7, up $17 from the week ending July 10 and highest since February. Export prices (for 30-kg bags, fob vessel) for California milled rice were quoted at $775 per ton for the week ending August 7, up $50 from the week ending July 10 and the highest since October 2011. California exported rice at a near-record pace during 2011/12, supporting the strong U.S. medium-grain prices. Price quotes for Vietnam, U.S. long- and medium-grain milled-rice prices, and U.S. rough-rice export prices are from the weekly Creed Rice Market Report.

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