What Market Fundamentals Can Affect The Rough Rice Futures?
Rice typically requires high average temperatures during the growing season, a plentiful supply
of water, a smooth land surface to facilitate uniform flooding and drainage, and a subsoil hardpan that inhibits the percolation
of water.
The rice market follows a fixed cycle of production. The rice
cycle goes from flooding, to vegetative, to reproductive, to ripening. During these key stages of the crop’s development
the rice futures prices are very sensitive to any potential supply disruption.
1.
Rice Planting U.S. rice planting typically begins in early March in Texas and southwest Louisiana. The Delta plants the bulk
of its crop in April, and California's crop is planted from late April through mid-May. Harvest begins in early or mid-July
in Texas and southwest Louisiana. Peak harvest in the South is in September and early October.
2. Rice Flooding At the onset of the rains or the arrival of irrigation water, fields are flooded with water depth
varying between 2 and 15cm. Rice plants are sown in nurseries and after 25-35 days are transplanted to the flooded fields
in clusters of 1-10 plants.
3. Rice Vegetative Phase The rice vegetative
phase is characterized by the increase in the plant height, the development of leaves and the development of secondary and
tertiary stems, each with the possibility of producing a panicle. The soil remains under water during this stage and the plant
structure remains vertical.
4. Rice Reproductive Phase the rice reproductive
stage lasts about 25-35 days. during a complete growth cycle, a rice plant will produce 10-20 leaves with only 5 to 10 existing
at any one time. Once the last leaves have formed, the plant flowers and distorts to allow the panicle to rise. Complete panicle
formation and flowering takes about 17-24 days
5. Rice Ripening The rice
ripening phase is characterized by a decrease in stem and leaf moisture content and a decrease in the number of leaves. In
some areas, irrigation is stopped during this period but in others, the fields remain flooded.
6. Rice Pests Rice pests include weeds, pathogens, insects, rodents, and birds. A variety of factors can contribute
to pest outbreaks, including the overuse of pesticides and high rates of nitrogen fertilizer application. Weather conditions
also contribute to pest outbreaks. For example, rice gall midge and army worm outbreaks tend to follow high rainfall early
in the wet season, while thrips outbreaks are associated with drought.
7.
Rice Diseases Major rice diseases include Rice Ragged Stunt, Sheath Blight and Tungro. Rice blast, caused by the fungus Magnaporthe
grisea, is the most significant disease affecting rice cultivation. Rice blast is fount in 85 countries including the United
States.
8. USDA Crop Reports The USDA publishes several key crop reports
that are helpful in your research and trading of rice futures and rice options. The USDA Rice Outlook report is a monthly
report. The report gives a good analysis of the U.S. and world rice market. The USDA Monthly Crop Report is released around
the 10th of each month. The report gives an updated estimate of supply and demand for rice.
These are just some of the basic fundamentals to keep in mind when you are considering a trade in the corn market.
Before opening up a commodity account to trade corn you should consult with a licensed commodity broker that follows the corn
market to discuss investment strategies.
