Rice futures have moved sharply higher, but cash has not. Lets look at how the cash guys may be thinking. I think they are very aware of the huge change the last report brought with lower stocks, which indicates a higher rate of use than was thought by most, and the obvious reduction in planted acres. All this will reduce long grain stocks from over 40 million cwt to under 20 million cwt at the end of the 2011 crop.
The cash guys no this but are not pushing market higher because first of all they know time is running out for farmers and they will be forced to sell old crop, so they just set back and wait foe the selling. Second they are setting on a large amount of rice. They have about 80% of the stocks, so its not like they are out of rice, but alot of there stocks are poor quality and low milling. So these reasons they are not pushing to buy rice.
So does this mean they wont come after old crop cash? Well no it doesn't, but if they do it will only be for the good stuff, high milling and low peck. I think at some point they will want this type of rice and they will seek it out. They have acted for so long like they dont want or need any rice it will be very obvious when this happens that the game has changed. If they do high quality old crop might bring a nice price.
