Cambodia Rice News: World Rice News: U.S. Rice Exporters Concerned About Falling River Levels

U.S. Rice Exporters Concerned About Falling River Levels

The U.S. cash rice market was quiet today as buyer and seller ideas remain about $0.50-$1.00 per cwt apart (roughly $11-$22 per ton). As of today, old crop offers from farmers were still hard to come however small lots could be found around $15.15 per cwt delivered (about $334 per ton), while offers from resellers pulled back with the futures market, although both offers generated only marginal interest.

Old crop bids from mills and exporters could still be seen around $14.65 per cwt delivered (about $323 per ton) while new crop bids for September delivery could be found at similar levels, however there are no takers at this time.

In the meantime, the drought that has plagued much of the U.S. this summer and decimated crops is now having an impact on marine transport activity on the lower Mississippi River. Currently, receding water levels on the Mississippi River are creating a logistical nightmare for rice exporters as water levels at several barge loading facilities are too low to load barges to full capacity and in some cases even at all. However, it's expected that river levels will rise about 4 feet this week, which may ease concerns for a bit, although many expect that this will be short lived.

Going forward, some analysts expect that falling river levels will create a backup of incoming rice at receiving facilities after the rice harvest and that this could ultimately lead to a wider basis (the difference between the cash and futures price) as traders look for places to move their rice.

Source: Oryza/31July2012

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