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Rice Outlook Summary (RCS-18F, June 14, 2018)

Core Content Overview

This report provides an analysis of the U.S. and global rice market outlook for the 2018/19 season, including production, supply, demand, trade, and price forecasts. It highlights significant changes in both domestic and international rice markets, with a focus on the impact of weather, trade policies, and market dynamics.

U.S. Domestic Outlook

Key Revisions to the 2018/19 Rice Balance Sheet

• Carryin increased by 3.0 million cwt to 37.3 million cwt due to trade revisions from the 2017/18 season.
• Imports rose by 1.0 million cwt to a record 27.0 million cwt, with all the increase in long-grain.
• Exports were raised by 2.0 million cwt to 103.0 million cwt, based on delayed shipments from the 2017/18 season.
• Domestic use increased by 1.0 million cwt to 123.0 million cwt, reflecting larger supplies.
• Ending stocks for all rice are projected at 41.5 million cwt, up 1.0 million cwt from the previous forecast and 11 percent above the same period in 2017/18.

Crop Conditions and Supply Projections

• Total U.S. production for 2018/19 is forecast at 203.2 million cwt, a 14 percent increase from the previous year.
• Long-grain production is forecast at 150.2 million cwt, up 17.5 percent, driven by expanded plantings in the South.
• Medium- and short-grain production is forecast at 53.0 million cwt, up 5 percent.
• Total U.S. supplies are projected at 267.5 million cwt, up 4.0 million cwt from the previous forecast.

Price Forecasts

• Season-average farm prices (SAFP) for all classes of rice are unchanged from last month.
• Long-grain SAFP for 2018/19 is projected at $11.00–$12.00 per cwt, with a midpoint 10 cents lower than 2017/18.
• Southern medium- and short-grain SAFP is projected at $11.20–$12.20 per cwt, a 30-cent decline from the previous year.
• California medium- and short-grain SAFP is projected at $16.50–$17.50 per cwt, slightly higher than 2017/18.

Regional Crop Conditions

• Delta region (Arkansas, Missouri, Mississippi): Conditions improved compared to 2017/18, with 71 percent of the U.S. crop rated in good or excellent condition for the week ending June 10.
• Gulf Coast (Louisiana, Texas): Conditions declined, with Louisiana at 69 percent and Texas at 57 percent in good or excellent condition.
• California: Conditions remained stable at 90 percent in good or excellent condition.

International Outlook

Global Production and Ending Stocks

• Global production for 2018/19 is forecast at 487.4 million tons (milled basis), a decrease of 2.15 million tons from the previous forecast.
• China's production was reduced by 2.3 million tons to 142.2 million tons, the smallest since 2011/12, due to a 2.0 percent area reduction and lower yields.
• Global ending stocks are projected to fall by 1.5 million tons to 143.2 million tons, the first decline since 2006/07.
• China's ending stocks are forecast at 96.0 million tons, the highest since 1999/2000.
• India is expected to be the largest exporter in 2019, with global trade projected at a record 49.5 million tons.

Trade Revisions

• U.S. exports for 2019 are projected to increase by 0.15 million cwt to 855,000 tons, driven by a record pace of imports from Asia.
• U.S. imports for 2019 are expected to remain at a record 855,000 tons, making the U.S. the second-largest importer in the Western Hemisphere after Mexico.
• Egypt is projected to increase rice imports by 350,000 tons to a record 400,000 tons, due to a significant drop in production.
• Nigeria is expected to increase imports by 0.4 million tons to 3.0 million tons, as production struggles to meet rising consumption.

Regional Highlights

• Latin America remains a major market for U.S. rough rice exports, particularly long-grain rice.
• Mediterranean markets purchase mostly medium-grain rice.
• Asia continues to be a significant export destination for U.S. milled rice.
• Sub-Saharan Africa is the largest rice importing region in the world, with imports projected at 16.2 million tons in 2019, up 6 percent from the previous year.

Key Market Trends

• Export price quotes from Thailand and Vietnam dropped 2–3 percent over the past month, while U.S. long-grain and medium-grain prices remained stable.
• U.S. exports are expected to grow due to increased supply and more competitive pricing.
• U.S. imports are forecast to rise due to higher demand and lower supplies from key sources like Egypt.
• Global trade is projected to reach a record high in 2019, with continued growth in imports from Sub-Saharan Africa and Latin America.

Summary of Key Figures

Conclusion

The 2018/19 U.S. rice market is expected to see increased supplies and ending stocks, driven by a larger production and import forecast. Despite this, export growth is anticipated due to more competitive pricing and demand from key markets. Globally, China's production and ending stocks are expected to decline, while India remains the largest exporter. Sub-Saharan Africa and Latin America are expected to see significant increases in rice imports, driven by population growth and supply constraints. The U.S. is projected to maintain its position as a major player in the global rice market, with a record import forecast and growing export opportunities.