Market Behavior: Spring

The old crop rice market has been strong, led by good milled rice export sales, domestic business, and strong rough rice exports. Rough rice exports were poor last crop year due to competition and elevated U.S. prices.

South American competitors ran low on supply in recent months, allowing the U.S. to pick up lost market share in Mexico and Central America. El Niño related weather issues in Asia dominated headlines recently and encouraged bullish traders to take the market higher.

Crop return calculations currently favor rice, although all crop returns are down significantly compared to last year. If U.S. long grain rice production increases more than five percent compared to the previous year, stocks could swell next year. Conversely, stocks will remain tight if long grain acres are reduced due to weather or seed issues.

Thus far in 2024, the soybean and corn markets have been disappointing. Traders took out most of the weather premiums for the South American growing season. They focused on poor Chinese demand for U.S. and South American soybeans.

USDA continues to increase projected soybean ending stocks, further creating bearish sentiment in Chicago. Traders expect Corn Belt farmers to switch a decent amount of corn into soybean acres this year. The market needs to see new demand or potential weather issues for the U.S. crop to spur a rally.

Grayson Daniels
Vice President of Grain Sales and Procurement

‍