The latest prices and key trends from the SM Commodities Index.
After a minor stumble, global rice prices are still up year-on-year even as global stocks grow higher, according to IHS Markit. The fear driving the bullish support through the third quarter has been ongoing concerns around Covid-19 forcing major exporting nations to shut down exports keeping a lid on food inflation.
The US crop is relatively large this year but a positive export outlook, along with harvest struggles during this year’s active hurricane season, leant further bullish support.
More recently the old adage ‘a rising tide lifts all ships’ comes to mind as spillover support from the corn and soy complex continues to keep underlying bullish factors in US rice futures as the market gears up for the 2021 acreage battle in the US.
A litany of issues are impacting rubber prices, including supply disruptions from Covid-19 related labour shortages in Southeast Asia, flooding and political unrest in Thailand and, on the demand-side, strong PPE shipments and a good recovery in auto production.
The supply concerns from Thailand have been especially disruptive to global markets, as Thailand is the number one producer of natural rubber in the world.
The demand-side surge has been particularly strong coming from China, which has seen a steady rise in demand for rubber recently.
In sum, tight regional balances, supply disruption concerns, and increased demand have worked together to support bullish natural rubber market sentiments.
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