Around the Spring Festival, unlike the continuous decline in corn and wheat market prices, the rice market set off a round of collective rise, once approaching the high before the opening of the scale, and the overall market sentiment was also activated. However, the good times did not last long, and after entering mid-March, in the market environment of increased selling pressure, the rise in the market price of rice was blocked, but it was only blocked, especially in the middle and late indica rice category.
First, the rotation of policy-based reserve paddy has been increasing
From the following statistical chart of the transaction comparison of the mid-to-late indica rice rotation sales (excluding two-way purchase and sales) of the central reserve grain in 2024 and the statistical detail chart in March, we can see that in addition to the Spring Festival holiday in February, the number of rotational sales in January and March is more than 400,000 tons, and the number of rotational sales in March can basically be determined to be more than 500,000 tons, and the turnover rate has shown a downward trend after entering March. At the same time, after late March, the number of mid-to-late indica rice rotation sales in the main sales area with relatively ample overhead period is also increasing. This means that with the increase in the supply side of the rice market, the demand side is not to mention weak, even if it remains stable, the supply and demand environment of the mid-to-late indica rice market will also be changed, which will constitute a certain suppression of the momentum of rice rise.
Second, a large amount of surplus rice grain in the market has entered the circulation and supply link
After the continuous rise in the market price of rice before and after the Spring Festival, not only can the farmers accept it, but also make the rice purchased by the grassroots grain points in the early stage to be unbundled, and even produce a certain profit. At the same time, considering that the temperature will continue to rise in the future, the lack of safe storage conditions is also an important exit factor.
Third, the purchase of increased reserves of policy-based rice reserves may be less than expected
Judging from the bidding and procurement transactions of the above three central grain reserves and reserve increase plans in Chongqing and Guangdong, which have been put into operation, the procurement of medium and late indica rice in the central grain reserves is basically in the stage of preparing grain, and the variability of the quantity is contrary to the level of market prices. In terms of local grain reserves, although the average transaction price is basically unchanged at present, and even has risen, it is basically clear that the increase in local reserve rice reserves in Chongqing has entered the end, and many cities in Guangdong, which were rumored to have increased the number of reserves, have completed the increase in reserves in advance in the first two years, and the remaining quantity also covers wheat, corn, rice, finished rice and other categories. From the perspective of procurement cost and difficulty, combined with the time node to be completed at the end of June, the demand for increased rice reserves in Guangdong's local reserves should be less than expected.
Fourth, the market price of rice in Southeast Asia has a downward trend
After the gradual debut of new rice products in the Southeast Asian market, which has a great impact on our rice market prices, the market prices began to come under pressure, and there is already a downward trend. However, on the whole, the cost of imported rice in China is still higher than that of the domestic market by nearly 1,000 yuan/ton, although it will not suppress the domestic rice market price in the short term, but the decline after the high consolidation is also the law, which will also psychologically pose a certain pressure on the domestic rice market and transmit it to the rice market.
Based on the above analysis, the author believes that for the mid-to-late indica rice market, although the market price increase is blocked, there is a high probability that it will continue to remain strong in the short term, and the market risk coefficient is small. It's just that from the perspective of the increase in holding costs, it is not possible to continue to rise or rise sharply, but it has also been falling, so it is better to keep the operation suggestions unchanged and cash in the pocket in a timely manner. (Source: Ningxia, Special Analyst of Jiangsu Grain and Oil Commodity Exchange Market)