By Rene Pastor

Rice stocks in the Philippines, one of the world’s key importers of the grain, fell to its lowest level in six months, with government and commercial warehouses holding barely a month’s supply to feed the country’s nearly 100 million people.

The Agriculture Department said rice inventories as of March 1st, 2013 stood at 1.94 million metric tons, the lowest since Sept. 1, 2012. Since inventories reached 2.78 million tons on November 1st, the level of rice stocks has fallen over 30 percent, government statistics showed.

The fall puts in perspective the decision by the National Food Authority (NFA), the government body which makes sure rice supplies are stable, to import 163,000 metric tons of rice.

While Manila has said the purchases are part of obligations under the World Trade Organization to import a total of 183,000 tons of rice in 2013, the shrinking stock level may have also spurred on the decision to bring the rice in at this time.

That leads to the next question: Will the imports be enough, or will more be needed?

Given the strength of rice demand and the need to boost stocks when the typhoon season hits, the wise money should be on more imports, not less.

The Philippines is one of the world’s top consumers of rice as the government of President Benigno Aquino said it is aiming to make the country self-sufficient in the grain this year.

A recent report by the U.S. agriculture attaché in Manila said self-sufficiency in rice by the Philippines will likely remain out of reach. The report is compiled by U.S. agriculture experts at its embassy in Manila and while it is not official U.S. government data, it is considered authoritative by the commodity trading community.

“While the (government) has successfully increased rice production and reduced imports in its drive toward self-sufficiency, the country remains a major importer,” the report prepared by Perfecto Corpuz and William Verzani said.

They said marketing year (August/July) 2012/13 rice imports “are expected to remain at 1.5 million tons, inclusive of unregistered imports, and are forecast to decline to 1.2 million tons in MY 2013/14 due to improved production and the (government’s) import cap.”

“Most experts agree that a low milling rate, high tariffs (35-40 percent) and a thriving economy will keep the Philippines a significant rice importer for the foreseeable future,” the report concluded.

As far as inventories go at this time, rice stocks in government warehouses are good for 17 days of daily consumption while those in commercial warehouses are enough for 15 days.

The Philippines consumes about 35,000 to 36,000 tons of rice per day. Normally, the government should have about two to three months’ worth of stocks on hand.

Of the planned rice imports by the Philippines, some 98,000 tons will come from Thailand, one of the world’s top rice exporters, with 25,000 tons each coming from China and India, and the remaining 15,000 tons from Australia, the government had announced last week.

The imports are also being done ahead of the third quarter of 2013, when rice inventories in the Philippines seasonally drop to their lowest level for the year. Traders believe the imported rice will likely arrive in mid-May or later.

The Philippine Commodities Digest believes Manila’s total rice imports in 2013 will eventually reach at least 850,000 tons. U.S. agricultural experts from the USDA feel the imports would hit 1.5 million tons of rice. The experts’ forecast is not official USDA data.

The Philippine government is pinning its hopes on high-yielding seeds and improvements in infrastructure facilities such as irrigation to boost rice output in the country. But limits in the acreage planted to rice, historically low yields, and a surge in rice demand brought on by an increasing population may well blunt the government drive for self-sufficiency in rice.

By Jack Scoville, The Price Futures Group

Rice seems to have topped out here for now in futures, but the situation in the western half of the world remains tight.

Rice bears got some help with competing crops moving lower in price, but planted area and production still look down for the coming year.

The U.S. Delta in particular has been wet and cold and progress in that region has been minimal.

Texas is about planted and areas of the Delta near the Gulf of Mexico are planted now. Farther north, though, little if any field work has been done. But, producers there have time, so there is not much concern yet.




By Rene Pastor

Wheat imports by the Philippines, one of the biggest buyers of the U.S. grain, are expected to decline while rising corn production is seen cutting imports by nearly half, a report by the U.S. agriculture attaché said.

With wheat production recovering in Canada and Australia, and increased flour imports from Turkey, the level of “U.S. wheat sales to the Philippines is expected to significantly decline” from the record in 2011/12 of $699 million, the report said. The attaché report is prepared by U.S. agriculture experts at its embassy in Manila. It is not official data from the U.S. Agriculture Department, but it is considered highly by the commodity trading community.

“Total wheat imports for milling and feed are expected to decline from 4.0 million (metric) tons in marketing year 2011/12 to 3.2 million tons in MY 2012/13 due to ample stocks and reduced feed use,” the report said.

Wheat imports by the Philippines are forecast though to rise slightly to 3.4 million tons in MY 2013/14 as inventories recover and milling use increases.

Culinary tradition in the Philippines includes the daily consumption of a small, rounded bread called the ‘pan de sal’ as part of its breakfast fare. The Philippines produces no wheat. The U.S. supplies anywhere from 85 percent to 90 percent of the wheat consumed by Filipinos.

Along with corn, the wheat is used mainly as animal feed for a rapidly expanding livestock and poultry industry.

Philippine corn imports stood at 202,000 tons in MY 2011/12, but they are expected to drop by over half to around 100,000 tons in 202/13 and drop even further to 75,000 tons in MY 2013/14 – relatively insignificant since the grain can be brought in on one Cape transport vessel which has a capacity of 100,000 tons.

Philippine corn production is expected to rise due to “expanded planting of biotech seed varieties and the Philippine government’s investment in infrastructure improvements,” the attaché report said.

Philippine corn production in 2012 reached a record 7.4 million tons.

By Jack Scoville, The Price Futures Group

Prices in futures and in cash markets continued to work lower last week in grains and oilseeds markets around the world. The main driving factor was the USDA quarterly stocks reports that showed bigger-than-expected supplies here in the U.S.

The news reports of a new bird flu outbreak in China gave ideas of weaker demand for soybeans and soybean meal there and also hurt futures.

This week, the USDA releases its monthly supply and demand estimates and the reports are expected to at least partially reflect the increased supplies shown in the quarterly stocks reports, although increased demand estimates should reduce the amount of the increase.

The reports will also include world estimates, and plenty of supplies around the world.

So the general trend has turned here in terms of news. It was not that long ago when everything pointed to tight supplies or even no supplies in the case of soybeans. Now the talk is that there is plenty available.

Charts also reflect the change.

Futures turned sharply lower in response to the stocks reports, and finally started to find some traction near the end of last week.

It is possible that a short-term bounce is coming. But the turn last week left charts with a look that lower prices are coming down the road.

Buyers can extend coverage now before the USDA reports, but should be aware of the change in the sentiment here and also on the charts and many will keep buying interest less than normal.

We don’t blame them. They are finally getting some relief, and should take advantage of it.

But keep an eye on the weather here in the northern half of the world. We all are looking at the potential for big crops in the coming year in the north, including the U.S., Canada, Europe, Russia, and everywhere else it seems.

But very little of it has been planted and the winter crops are proving to be less than stellar, so things could change fast if the weather is not good.

The weather is fine for now, but too wet and cold in many areas of the northern half of the world and initial progress is slow.

The U.S. Agriculture Department (USDA) released its quarterly stocks estimates about two weeks ago.

Hereunder is the USDA quarterly stocks data:

Dec. 1 Mar. 1
USDA Average Range Stocks Stocks
Corn 5.40 5.030 4.916-5.248 8.030 6.023
Soybeans 1.00 0.947 0.912-1.059 1.966 1.374
Wheat 1.23 1.167 1.010-1.238 1.660 1.199

By Rene Pastor

Thai domestic and export prices for rice were largely unchanged from the previous week, except for parboiled rice, which declined about 1 percent to 2 percent due to a lack of new inquiries, a report by the agriculture attaché at the U.S. embassy in Thailand said. The report by the attaché is not considered an official report by the U.S. Agriculture Department, but it is considered authoritative by the commodity trade.

Thailand is one of the top exporters of rice in the world.
The report said unofficial Thai rice exports, not including fragrant rice, for the period March 25 to 31, 2013 totaled 71,921 metric tons, down 5,280 tons from the prior week, and down 1,624 ton from the four-week moving average of 73,544 tons.

Exports of Thai white and parboiled rice from January 1 through March 31st, 2013, totaled 1,064,342 tons, down 11.7 percent from the 1,204,938 tons over the same period last year, the report said.


There are no tropical typhoons threatening the Philippine archipelago or its rice-growing areas as the country is in the middle of its summer season, the government’s Pagasa weather forecasting agency said

The country will have generally good weather aside from isolated rain showers or thunderstorms, mostly over the central Visayas and southern Mindanao islands, Pagasa said.

The dry season in the Philippines normally runs from late November to May of the following year. The rainy season normally begins in June.

By Jack Scoville, The Price Futures Group

Wheat is the one market that has been able to hold strong. News reports of freeze damage to crops helped support prices here, but it was really talk of Chinese and Russian buying interest that made these markets strong.

Wheat needs better weather here in the U.S. and also in Europe and Russia. It is too dry here and too cold in the other two producing regions.

Usually, wheat prices start to move lower as the crops come out of dormancy and start to green up and look good. But crops are in such poor shape here that so far that has not happened.

Wheat is going to be a weather market for a while and buyers should be comfortable with purchase levels. Consider using futures or options to offset potential price risk if a buyer is unable to ensure adequate supplies in the cash market.

By Jack Scoville, The Price Futures Group

Palm oil held last week on news of stronger-than-expected exports from private sources and on ideas that the Malaysia Palm Oil Board (MPOB) this week will show lower stocks.

It is a lower production cycle time for east Asian palm oil producers, and this cycle will play itself out over the next couple of months.

Demand has not been bad considering price weakness in competing vegetable oils.

Futures markets appear to be in a trading range, implying stable prices in east Asian cash markets.

The fundamentals seem to imply stable markets for now as well. The MPOB data this week will probably point the market in the direction of its next price move, but neutral data and a sideways trade seem indicated by analysts at this time.


Cash wheat bids for April delivery ended the reporting week on Thursday, April 4th, were mixed compared to week-ago bids for the same delivery period. Hard red winter wheat bids trended lower, dark northern spring wheat bids trended higher, and bids for soft white wheat were steady to lower.

May wheat futures ended the reporting week on Thursday, April 4th, mixed, as follows compared to last Thursday’s closes: Chicago 6.25 cents higher at 6.94, Kansas City five cents lower at 7.2175 and Minneapolis 6.25 cents higher at 7.8650. Chicago May corn futures trended 65.25 cents lower at 6.30 while May soybean futures closed 32.75 cents lower at 13.72.

Wheat futures were higher for the week, with support coming later in the week from a lower good/excellent crop rating report, potentially crop damaging weather in the U.S. wheat-growing areas, and increasing demand.

Early in the week, wheat futures were pressured by the bearish grain stocks and planting intentions report released on March 28, spillover pressure from the lower corn futures and chart selling.

Corn futures were lower for the week, with the bearish grain stocks and planting intentions report, slow export demand, and a higher U.S. dollar on Tuesday as pressuring factors. Soybean futures were pushed lower this week by spillover pressure from the lower corn and wheat markets on Monday, lower-than-expected inspections-for-export figures, continued shipments from South America, and uncertainty in the feeding industry in China due to the bird flu outbreak.


Bids for US 1 Soft White Wheat, delivered by unit trains and barges to Portland during April ended the reporting week on Thursday, April 4th, at 7.95-8.10, mostly 8.0475. Last Thursday’s noon bids were 8.0775-8.10 for April delivery.
There were no white club wheat premiums for nearby delivery for this week or last week.

Bids for US 1 Soft White Wheat delivered during April trended steady to 12.75 cents per bushel lower than last Thursday’s noon bids for April delivery. There were no white club wheat premiums for nearby delivery for this week or last week. Some exporters were not issuing bids for nearby delivery.

Nearby bids for US 1 Soft White wheat began the reporting week on Friday as not available as the grain markets were closed.

On Monday, bids began the reporting week at the weekly high of mostly 8.0550, then fell to mostly 7.9525 on Tuesday, before rising slightly to 7.98 on Wednesday. Today (Thursday), bids ended the week at 8.0475.
There were no new confirmed export sales of white wheat this week.

Forward month bids for soft white wheat were as follows: May and June 7.95-8.10, July 7.95-8.00 and August New Crop 7.35-7.48. One year ago, forward month bids for soft white wheat were as follows:
May 6.95-7.05
June 6.80-6.95
July 6.64-6.85
August New Crop 6.64-6.65

Bids for 11.5 percent protein US 1 Hard Red Winter Wheat for April delivery declined by five cents per bushel compared to last Thursday’s noon bids for the same time period and lined up with the lower Kansas City May wheat futures. On Thursday, bids were as follows:
April 8.5175-8.6675, mostly 8.6175
May 8.4175-8.6675
June 8.3375-8.6375
July not available
August New Crop 8.0525-8.1025

Bids for non-guaranteed 14.0 percent protein US 1 Dark Northern Spring Wheat for April Portland delivery trended 6.25 cents per bushel higher compared with last week’s noon bids for April delivery. Higher Minneapolis May wheat futures supported bids. Protein scales for non-guaranteed 14.0 percent protein were plus zero cents each 1/4 of a percent of protein up to 16 percent protein and minus four to five cents each 1/4 of a percent of protein down to 13 percent protein. On Thursday, bids for non-guaranteed 14 percent protein were as follows:
April 9.1650-9.3650, mostly 9.2950
May 9.1150-9.3150
June 8.9950-9.0450
July not available
August New Crop 8.73-8.83

Bids for US 2 Yellow Corn delivered to Portland in single rail cars were 269.25-270.25, 23.75 to 24.50 per ton lower than last Thursday’s bids of 293.75-294.00. Bids for US 2 Yellow Corn truck delivered to the inland feeding areas of Yakima, Washington, and Hermiston, Oregon were 271.50-274.75, 23.25 to 23.50 per ton lower than last Thursday’s bids of 294.75-298.25. Lower Chicago May corn futures pressured the cash corn bids.


There were seven grain vessels in Columbia River ports on Thursday, April 4, with four docked compared to ten last Thursday with four docked. There were no new confirmed export sales this week.

Outstanding U.S. white wheat export sales as of March 28, 2013 for the marketing year beginning June 1, 2012 and ending May 31, 2013, totaled 653.3 thousand MT compared to 675.6 thousand MT on March 21, 2012, and 1357.4 thousand MT one year ago.

Outstanding white wheat export sales for the 2012-2013 marketing year were to the following countries in 1000 MT:
Japan 135.8
Philippines 103.0
Yemen 100.00
South Korea 92.7
Thailand 49.5
Nigeria 19.2
Taiwan 10.0
Burma 2.5
Canada 1.3
Malaysia 1.0
Sweden 0.5
Hong Kong 0.3
Total unknown 137.5

Accumulated white wheat export shipments as of March 28, 2013, in 1000 MT for the 2012-2013 marketing year, totaled 3869.3 compared to 4372.0 one year ago.

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