20110525 creed rice market report

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May 25, 2011 - of 4

Southern U.S. - Long Grain Abbreviation Quote BasisU.S. #2 Long Grain, max. 4% Broken, Hard Milled #2/4% $23.00 per cwt. sacked, F.A.S. U.S. GulfU.S. #2 Long Grain, max. 4% Broken, Hard Milled #2/4% $23.00 per cwt, BULK, FOB Vessel US GulfU.S. #2 Long Grain, max. 4% Broken, Hard Milled #2/4% $23.50 per cwt. containerized FOB US GulfU.S. #2 Long Grain, max. 4% Broken, Hard Milled #2/4% $560.00 per mt sacked delivered Laredo TXU.S. #2 Long Grain, max. 4% Broken, Hard Milled #2/4% $24.50 per cwt sacked delivered Miami FLU.S. #3 Long Grain, max. 15% Broken, Hard Milled #3/15 $22.00 per cwt. sacked, F.A.S. U.S. GulfU.S. #3 Long Grain, max. 15% Broken, Hard Milled #3/15 $550.00 per mt sacked delivered Laredo TXU.S. #2 Long Grain Brown, max. 4% Broken, 75% yield #2/4/75 no quote per mt bulk FOB vessel NOLAU.S. #1 Parboiled L/G Brown, max. 4% Broken, 88% yield #1/4/88 no quote per mt bulk FOB vessel NOLAU.S. #1 Parboiled L/G MILLED, max. 4% Broken (except 0.8% damage) #1/4 Parb no quote per mt sacked FOB vessel NOLAU.S. #1 Parboiled L/G MILLED, max. 4% Broken #1/4 Parb $600.00 per mt bulk FOB vessel NOLAU.S. #2 Long Grain Paddy, 55/70 yield #2 55/70 $280.00 per mt bulk F.O.B. vessel NOLALong Grain, max. 20% broken, Hard milled (Ghana specs) #4/20/hm $21.00 per cwt. sacked, F.A.S. U.S. GulfU.S. #5 L/G, max. 20% broken, WELL MILLED #5/20/wm $20.50 per cwt. sacked, F.A.S. U.S. Gulf

Southern U.S. - Medium GrainU.S. #2 Medium Grain, max. 4% broken, Hard Milled #2/4% no quote per mt bulk FOB vessel NOLAU.S. #2 Medium Grain Paddy, 58/69 yield #2 58/69 no quote per mt bulk FOB vessel NOLA

U.S. South Brokens:Flour Quality brokens Flour Qlty $15.00 per cwt. bulk, F.O.B. railPet Food Quality / #4 Brewers (milled) contracts M/A $13.50 per cwt. bulk, F.O.B. rail

U.S. California Brokens:Flour Quality brokens Flour Qlty $19.00 per cwt. bulk, F.O.B. millPet Food Quality / #4 Brewers contracts M/A $14.00 per cwt. bulk, F.O.B. mill

California - Package QualityPackage Rice for Industrial Use and Repackers #1/4% $37-$38 per cwt. bulk F.O.B. Mill

California - Medium GrainU.S. #1 Medium Grain, max. 4% Broken #1/4 $835.00 per mt sacked containerized FOB MillU.S. #1 Medium Grain, max. 4% Broken #1/4 $875.00 per mt sacked containerized OaklandU.S. #1 Medium Grain milled rice, except max. 7% Broken (Japan Specs) #1/7% $875.00 per mt sacked in 30kg bags FOB vesselU.S. #3 Medium Grain Brown rice, max. 8% broken (Korea Specs) #3 Brown $810.00 per mt in totes containerized OaklandU.S. #1 Medium Grain Paddy, 58/69 yield #1 58/69 $550.00 per mt bulk ex-spout Sacramento CA

Market ReportMay 25, 2011

World Market Price Value Factors

This week05/25/11

Last week05/18/11

1 Year Ago05/26/10 LDP 2010 Loan

FactorsLong Grain To be 18.31 14.79 00.00 9.91Medium Grain issued 18.00 14.52 00.00 9.65Short Grain May 25 18.00 14.52 00.00 9.65Brokens 8:30am 12.96 10.18 - 7.01

WMP and Loan Rates ‘10 crop L/G M/G

Yield 52.78/14.31 61.03/8.69WMP 11.52 12.11Loan 6.23 6.50Difference (5.29) (5.61)

U.S.D.A. World Market Price:

Posting: (June Shipment)

Southern U.S. - Package QualityPackage Quality Parboiled L/G, max. 4% broken (0.8% damage) Pkg. Parb. $28.00 per cwt. bulk F.O.B. millPackage Quality Long Grain Milled, max. 4% broken Pkg. L/G $21.50 per cwt. bulk F.O.B. millPackage Quality Long Grain Milled, max. 4% broken (select variety) Pkg. L/G $24.00 per cwt. bulk F.O.B. millPackage Quality Long Grain Brown Rice, max. 4% broken Pkg. Br. $31.00 per cwt. bulk F.O.B. millPackage Quality Medium Grain Milled, max. 4% broken Pkg. M/G $35.00 per cwt. bulk F.O.B. mill


May 25, 2011 - of 4

Far East ReportSOUTHEAST ASIAN MARKETS

In Thailand, the market remains relatively quiet as prices are slightly softer, primarily account a weakening of the Thai Baht. Thai and Viet prices continue to be virtually at par with one another. Supplies are plentiful as the dry season harvest is all but complete.

100% B is quoted at $485-$490 per mt FOB Bangkok; 5% is $465-$470, and parboil is only at a slight premium to white, account cheaper competition out of Brazil.

Iraq has floated a new tender for 60,000 mt July arrival for closing May 29 for reply June 6. Given today’s values combined with a freight advantage over origins in the Western hemisphere, Thailand is in excellent position to secure this tender. However, Vinafood may have something to say about that.

Otherwise, on the political side of the equation, an election will soon decide whether the existing Democratic government will stay in power or be unseated by the rival Pheu Thai party. The current regime has been operating under a subsidy based insurance scheme that is basically a subsidy to the growers. The rival party has proclaimed they would impose an intervention policy which in effect would double the price of the present paddy market. It remains to be seen whether they would truly follow thru with this bold proposal or whether it is simply window dressing to get the vote of the farmers. After all, there is no export market for $800-$900 per mt rice and imposing that kind of price locally would not only fuel inflation but put the government further in debt...another example why politics and commerce are like oil and water...they just don’t mix well.

In Vietnam, exports continue at a respectable pace, however prices are softer as supplies are plentiful account the arrival of the main season harvest. Prices are mostly sideways to slightly softer. 5% is quoted at $465-$470 per mt FOB HCMC (same as Thai); whilst 25% is lower than Thai at $430-$435. Exports are expected to reach 3 MMT by the end of this month, which would be on pace for the 6.4 MMT forecast for all of 2011.

In The Philippines, The NFA recently completed awarding all of the 660,000 mt import licenses to private traders. As I understand the program, these private importers (66 in all) are allowed to bring in their quota without duty. And, they have 60 days to do so. There is an additional 187,000 mt that NFA will bring in from locals which will be subject to 40% import duty and will be used as buffer stocks. These two schemes are operating at almost the exact opposite of what we have seen in the past, as I would have thought NFA would act free of tariff and privates would be subject to same. Further, the government has stated publicly that their intention is to import only 860,000 mt this year, well short

Thailand Vietnam India Pakistan Uru. Arg. Brazil100%B $485.00 5% $470.00 Export ban, MEP $900

5% $465.00 5% N/A 5% $490.00 $515.00 $515.0010% $460.00 10% $460.00 10% N/A 10% no quote $505.00 $505.0015% $455.00 15% $450.00 15% N/A 15% no quote no quote no quote25% $445.00 25% $430.00 25% N/A 25% $440.00

Parb. 5% N/A Parb 5% $520.00 $480.00Brokens $410.00 Brokens $410.00 Var. 1121 $1350 Parb 15%* $500.00 Brokens

Parb. 100B sorted $490.00 MEP-5% $490.00 Basmati Brokens $400.00 $385.00Thai Hom Mali $930.00 MEP-25% $470.00 Traditional $1800 Basmati Paddy

Frag. Brokens $465.00 Pusa $1300 S. Kernal $1300.00 $290.00All prices basis U.S. dollars per metric ton, F.O.B. vessel, corresponding home port *Bangladesh Specs.

OFFSHORE QUOTES

of the projected 1.4 MMT, and a mere 35% of what they bought during the 2010 campaign...a lot of unusual and confusing issues at stake here, if you ask me.

In any event, Thailand and Vietnam will likely vie for this business, as might Myanmar and Pakistan...which will not be enough business to stimulate the global market, in my view (provided the numbers hold true)...we shall see.

Thailand ExportsJan. 1 - May 4, 2011: 4,088,128 mt Jan. 1 - May 4, 2010: 2,780,167 mt Jan. 1 - May 7, 2009: 2,902,710 mtThai Baht 30.10-30.15 : 1 US Dollar

INDIA AND PAKISTANIn India, this is where we find the most intriguing news in

the region. There seem to be conflicting reports as to whether or not Non-Basmati parboil milled rice is free of restrictions and eligible for export. According to some local print media, it was lifted over this past weekend. One thing is for sure, millers and exporters, as well as growers and many political leaders have made a strong push to get the ban lifted, at least in part. Paddy rice can now move from province to province, in the interest of relieving pressure on godowns. Huge wheat and rice buffer stocks (42 MMT) have been a major logistical issues for months. Whereas local prices are quite low, the government wants to avoid fueling inflation by totally freeing up exports and driving up local prices...I’m not so sure that would happen as their stocks are overwhelming, and the opportunities offshore do not emulate same. In any event, we now have the partial lifting of the ban for some varieties, as the CRMR has referenced dating back to the Spring of 2010.

In Pakistan, the market is relatively quiet with prices a bit firmer...not sure that I can discern exactly why, as there is no offshore demand to support it. Perhaps it is the border trade with Iran that is lending strength to the market account GTC’s payment issues and inability to get rice elsewhere for a number of reasons. And, there is the potential for further business with Bangladesh.

IRRI-6 5% is now quoted at $490 per mt FOB Karachi; while 25% is around $440 (higher than Viet and about the same as Thai). Parboil super kernel 5% is $520-$525 and 15% (the type Bangladesh buys) is more like $500-$505.


May 25, 2011 - of 4

U.S. ReportU.S. GULF, MERCOSUR, & FUTURES

Given the quiet nature of the market offshore, all the focus seems to be on the flooding in the Mississippi Delta and the prognosis for planting the balance of the crop in the mid South, which is about 18-20% of the projected acreage according to USDA’s latest crop progress report. With any luck with the weather, and that is the key, we anticipate the crop in Arkansas could still reach the range of 1.1-1.2 million acres...but it needs to stop raining. Over the weekend, there was more rain throughout America’s heartland, not to mention numerous devastating tornadoes. And, hurricane season is upon us. The weather is obviously what has been driving the futures market as we witnessed 3-month highs last week.

As far as the cash market is concerned, milled prices are up ever so slightly over the past couple of weeks in sympathy for strength in the futures market as well as the cash paddy market account the aforementioned weather concerns. In my view, they are overdone, as offshore demand just does not follow the same path.

Long grain paddy barges are bid/offered at $265/285 per mt FOB NOLA. For all practical purposes, the river is still not navigable, as one can not go from upriver to load port. However, parts of the upper river is moving barges in daylight hours.

#2-4% is quoted at $525-530 per mt bagged FOB or around $500-510 basis bulk. However, aside from some limited movement to Haiti, export demand is virtually nil.

In our report of April 20, we illustrated the somewhat ironic situation whereby the pace of US milled rice exports were ahead of last year account heavy sales at, and before, harvest due to very low

prices. Since then, those statistics have been reversing:April 20 milled rice exports were 14% ahead of last year.April 27 - 13%This week - 12%Our production numbers for Mercosur are unchanged as

follows (basis paddy):Brazil -- 13.4 MMTArgentina -- 1.7 MMTUruguay -- 1.5 MMTExport activity has been quite brisk with most of the mills in

the region booked for June and into July. We look for total exports in the region to be in the 3 MMT range. Prices are steady to firm within $5-10 of U.S. values.

CALIFORNIA, AUSTRALIA & THE “MED”We see no substantive change in the market

here as mills continue to ship against old contracts for Korea, Libya, and Japan, among others in the Mediterranean.

Prices are mostly sideways with #1-4% still quoted at $37 per cwt. bulk FOB mill or $875 CY Oakland.

Although the mills are mostly booked thru June and into July, they will begin to take some down time for repairs, vacation, and fumigation, in addition to compliance with PG&E hours.

In Australia, the harvest has been completed and the production numbers seem to be right on the 800,000 mt basis paddy.

In short, the global medium grain market appears to be quite healthy.

CBOT Rough Rice Futures (05/23/11 Volume: 765 Open Interest: 22,392)

Contract Month

Tuesday’s Close Price

Net Change From PricesMonday Last Report One Year Ago 05/25/10

‘11 Jul $15.130 UP 0.050 UP 0.740 ‘10 Jul $11.620‘11 Sep $16.030 UP 0.100 UP 0.705 ‘10 Sep $11.750

‘11 Nov $16.335 UP 0.100 UP 0.740 ‘10 Nov $11.870‘12 Jan $16.615 UP 0.070 UP 0.725 ‘11 Jan $12.145

‘12 Mar $16.885 UP 0.070 UP 0.705 ‘11 Mar $12.425‘12 May $17.105 UP 0.070 UP 0.705 ‘11 May $12.710

U.S. Paddy Market ReportTexas - The market is mostly quiet. Buyers’ ideas for L/G are $5.75-$6.75 per cwt over loan depending on variety. Unlike Arkansas, Texas continues to suffer drought conditions which could limit the second crop.

Louisiana - Long grain bids are unchanged at $11.50 per cwt FOB farm for both old and new crop.

Mid South - More rain! The date for filing claims on crop insurance is approaching in the next few days and with many fields still under water, it is likely that growers in those areas will file for benefits and will not plant this year. It is still too early to determine with any accuracy just how many acres that will be. The cash market is

mostly quiet as load facilities at the river are closed and the industry is preoccupied with flood issues. Nominal prices are $11.11 per cwt delivered mill with offers at $11.11 FOB farm.

California - 2010 and 2011 Calrose M/G traded this past week at $14.00 per cwt over loan.

Reflective Prices (all basis per cwt FOB country, 2010 Crop)Texas Louisianna Mid-South California

Long grain $12.25-13.25 $11.50 $10.50b/11.11a *Med Grain * 14.50 new crop $17.25 $20.50

L/G is #2 55/70, M/G is #2 58/69 (California #1)* - These areas do not have sufficient supplies of this type to quote.


May 25, 2011 - of 4

Rice Emerged - Selected States -- Week Ending

State May 22, 2010 May 15, 2011 May 22,

20112006- 2010

Avg.Arkansas 94 50 63 81California 14 10 15 37Louisiana 96 97 98 94

Mississippi 85 77 84 86Missouri 97 21 32 80

Texas 90 80 81 946 States 81 53 61 77

USDA Export Sales Highlights(May 6 - 12, 2011)Sales

Net sales of 166,100 MT were up noticeably from the previous week and 16 percent from the prior 4-week average. Increases were reported for:

Haiti (14,100 MT)Mexico (12,400 MT)Honduras (7,300 MT)Guatemala (4,000 MT)Saudi Arabia (2,100 MT)

Decreases were reported for:Dominican Republic (500 MT)

ExportsExports of 96,900 MT were up noticeably from the previous week and up 77 percent from the prior 4-week average. The primary destinations were :

Mexico (25,800 MT)Libya (21,500 MT)Haiti (14,500 MT)Japan (14,200 MT)Honduras (9,900 MT)

Source: USDA

Upcoming Events:June 7-9, 2011 TRT Americas Conference 2011 For more info go to: trtamericas.comJune 26-30, 2011 USA Rice Millers’ Association Convention For more info go to: www.usarice.com

Please note:June 8 No Creed Rice Market Report to be issued account our atten- dance at the TRT Americas Conference.June 29 No Creed Rice Market Report to be issued account our atten- dance at the RMA convention.

Upcoming Tenders:May 26 AARQ TRQ tender NOTICE OF OPEN TENDERIndependent bids are invited for rights to ship U.S.-origin milled rice to the European Union under a tariff-rate quota (TRQ) granted by the EU to the United States. Bids must be submitted on May 26, 2011 for the July 2011 TRQ Tranche, in which the following quantity is available: Volume (metric tons) EU DutySemi-Milled or Milled Rice 9,680 zero (HTS item 1006.30)TRQ Certificates will be awarded to the highest bidder(s). Any person or entity incorporated or domiciled in the United States is eligible to bid. The minimum bid quantity is 18 metric tons. Per-formance security (the lesser of $50,000 or the total value of the bid) must be submitted with each bid. Potential bidders may obtain the required bid forms and bid instructions from:AARQ Administrator -- Economic Consulting Services, LLC -- 2001 L Street, NW, Suite 1000 -- Washington, D.C. 20036 -- Tel: (202) 466-1150 Fax: (202) 785-3330Note: Potential bidders should consult regulations in the Official Journal of the European Union to determine the applicable tariff rate on semi-milled/milled rice. AARQ disclaims any responsibility for advising potential bidders on applicable tariff rates. Potential bidders should also consult EC regulations relating to testing for unauthorized GMOs.

May 29 Iraq tender to buy 60,000mt for reply June 6.June 2 KCCO Inv. 2000000193 tender to buy 630mt: (420mt of #5/20% L/G Parb well milled, and 210mt of #5/20% L/G Well Milled, for inland plant shipment July)

Tenders Results:May 17 KCCO Inv. 2000000147 bought 1030mt of US #5/20% long grain milled rice at $487.20 per mt intermodal Chicago.May 24 KCCO Inv. 2000000164 amended tender to buy 8880mt: (6500mt of #2/4% L/Grain Hard Milled in 25kg bags, 590mt of #2/7% Parboiled L/G Well Milled, and 1790mt of #5/20% L/G well milled). Results pending.

Rice Condition - Selected States: Week Ending May 22, 2011---------------------------------------------------------------------------- State : Very poor : Poor : Fair : Good : Excellent ---------------------------------------------------------------------------- : percent : Arkansas .......: 4 16 46 26 8 California .....: - - 20 60 20 Louisiana ......: 2 5 25 56 12 Mississippi ....: - 2 24 56 18 Missouri .......: - 39 47 14 - Texas ..........: 1 1 56 35 7 : 6 States .......: 2 12 37 38 11 : Previous week ..: 3 14 29 48 6 Previous year ..: - 4 28 53 15 ----------------------------------------------------------------------------- Represents zero.

Rice Co-Products - Spot market prices basis $ per short ton bulk, FOB mill (very limited supply in the South, except hulls)Texas Louisiana Arkansas California

Bran: $110-$115 $105 $135 $140-$150Mill Feed: $45 $35 $60

Ground Hulls: $5 $5 $15Unground Hulls: $5 $5 $12 $8

Creed Rice Co. Inc. 800 Wilcrest Suite 200 Houston, Texas 77042 USAPh 1.713.782.3260 Fax 1.713.782.4671 www.creedrice.com email: [email protected] & [email protected]

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Rice Planted - Selected States -- Week Ending

State May 22, 2010

May 15, 2011

May 22, 2011

2006- 2010Avg.

Arkansas 98 63 84 90California 76 60 75 76Louisiana 99 99 99 98

Mississippi 97 85 94 93Missouri 100 29 53 92

Texas 99 95 98 986 States 95 69 84 90

USDA Crop Progress

20110525 creed rice market report

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