Market Behavior

The last few months of 2025 were tough on the rice market. Fund traders were relentless sellers, and demand was too weak to counter them. So far in 2026, the market is showing some promising signs of life. The extraction of Nicolas Maduro in Venezuela prompted the early stages of the rally, as it provided some optimism for U.S. rice demand. Exports from the U.S. to Venezuela have been erratic over the past 25 years, but have reached 12-15 million bushels in the big years. Given recent geopolitical developments, there is also renewed hope for the Cuba and Iran markets, which were significant for U.S. rice in decades past. 

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USDA’s January updates increased production slightly for the 2025 crop and reduced imports. Exports were reduced, reflecting the weak demand from 2025; however, domestic use was increased substantially. The net of all the January changes reduced ending stocks to 77 million bushels. Crop returns favor soybeans; therefore, unless the rice market can make a substantial rally into late winter, rice acres could be substantially reduced. If long grain rice acres are reduced by 25% or more, it could lead to dramatic stock tightening into 2027. 

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The January USDA update increased soybean production from the 2025 crop, reduced exports, and increased crush. The net of all January changes increased the soybean ending stocks from 290 million bushels to 350 million bushels. The market reacted negatively to the increase in ending stocks; however, positive rumors concerning EPA’s expected final rule on biofuels created a rally that offset the majority of the selloff. 

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South American weather has been pretty good; therefore, market focus will increasingly turn to U.S. planting intentions. Last year, the U.S. planted 81.2 million acres. Acres should increase this year, but as long as they don’t exceed 84 million, they shouldn't be a drag on the market

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Grayson Daniels

VP, Grain Sales and Procurement