The Learn About Futures Insider: Rough Rice (Part 2)

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Part 1: http://www.italkcash.com/forum/commodities/309534-learn-about-futures-insider-rough-rice-part-1-a.html#post421239

Part 3 : http://www.italkcash.com/forum/commodities/309535-learn-about-futures-insider-rough-rice-part-3-a.html#post421240

Labor intensive, rice cultivation also requires plenty of water. Young seedlings are normally settled in flooded fields and once the small flowers are pollinated by wind, the grass will produce small seed grains. Each grain is covered in a layer of bran and a husk with an approximate proportion for each being 22% husk, 10% bran, and 68% rice. Rice without the husk is what is commonly known as brown rice. If the hulls and bran are removed, the resulting grains are milled – or white – rice.

Types of rice are often categorized by the length of the grain. Typically, long grain rice is slender and, when cooked, lower starch content yields lighter and fluffier rice. Medium grain rice is shorter and wider and more likely to cling together while short grain rice is squatter still and stickier and normally chewy when cooked. There are other specialty rice types which may have other cooking or aromatic qualities such as Basmati rice. A seemingly endless parade of rice cultivars exists with the two most common being indica and japonica.

Select global consumption, exports, and production of rice are as follows:


**Data courtesy of the USDA


**Data courtesy of the USDA

Key Uses

As food, rice is not as high in protein as other cereal crops, but it remains a good source of vitamins and minerals, is low in calories, and contains only trace fats. Rice can also be enriched with added nutrients which may be lost during processing. Rice is also ideally suited to manufacturing various food products including cereal, snacks, and baby food. Rice is also used in brewing beer.

Besides the precious grain, rice bran is also an excellent source of nutrients. It is often used as livestock feed. Rice bran oil can be used for cooking and hulls can be burned as fuel or used as mulch.

Key Concerns

Fundamental Reports – Rice is included in the crops reviewed in the monthly WASDE report and Crop Production and the USDA also releases a monthly report entitled “The Rice Outlook”.

Weather – Besides the basic agricultural concerns regarding temperature and rainfall, rice production areas across the globe may also experience extreme weather issues like cyclones and hurricanes which may impact prices. Notably, the possible damage from Cyclone Nargis, which hit Burma (Myanmar) in 2008 was widely cited as a contributing factor to the following fear of rice shortage and jump in prices.

Disease and Pests – Rice crops can be at risk for any number of fungal or bacterial diseases. Stink bugs and weevils are major pest concerns. Other diseases can be related to factors like zinc deficiency or salt water damage.

Geopolitical Issues – Attention should also be paid to international issues including the foundation of the Organisation of Rice Exporting Countries (OREC). If founded in its entirety by 2012, as proposed by Thailand’s former Prime Minister, it is unclear whether this union of 21 rice exporting nations (including original member nations Cambodia, Laos, Myanmar, Thailand, and Vietnam) would aim to fix prices similar to actions by OPEC. The proposed purpose is to stabilize food production.

Environmental Impact – Concern exists regarding the high water input needs of rice crops. However, rice growing is often viewed as a positive force providing habitats for waterfowl and wetland dependant organisms in the United States. Flooded rice fields are often cited as a significant source of methane emissions.