Rice Extends Gains to 1-1/2-Year High

Rice futures extended gains above $14 per hundredweight, reaching their highest level since January 2025, as traders weighed mounting climate risks and renewed geopolitical tensions. Forecasts point to the development of a strong El Niño across key producing regions in Southeast Asia and parts of the Southern Hemisphere, with rice considered among the crops most vulnerable to adverse weather. Despite these concerns, global supplies remain ample following several strong harvests, led by India. India's stockpiles reached an all-time high of 68.4 million tonnes in June. Indonesia has also accumulated record reserves as farmers accelerate planting ahead of potential weather disruptions, and Thailand's inventories are at their highest level in a decade. Meanwhile, renewed tensions in the Middle East have increased concerns over possible disruptions to commodity shipments through the Strait of Hormuz.

Rice futures traded around $13.5 per hundredweight, their highest since June 2025, amid climate risks and fresh geopolitical tensions. Analysts expect a very strong El Niño to develop in the coming months across key producing regions in Southeast Asia and parts of the Southern Hemisphere, with rice viewed as the most vulnerable crop. Still, global rice stocks remain abundant after successive strong harvests, led by top grower India. World milled rice inventories reached a record 196.2 million tonnes at the start of 2026, with India's stocks climbing to an all-time high of 68.4 million tonnes in June. Indonesia, a major rice importer, is holding record stockpiles as farmers speed up planting to mitigate El Niño risks. In Thailand, inventories are at their highest level in a decade, with fresh second-crop arrivals expected from late July. Meanwhile, ongoing Middle East tensions have raised the risk of disruptions to commodity shipments through the Strait of Hormuz.

Rice futures traded around $12.7 per hundredweight, their lowest in two-weeks, as supply fundamentals remained favorable despite weather-related risks. While El Niño could disrupt upcoming harvests, elevated inventories and expectations of near-normal conditions in key producing regions are expected to cushion the impact. Global rice stocks remain abundant after successive strong harvests, led by India. World milled rice inventories reached a record 196.2 million tons at the start of 2026, while India's stocks climbed to an all-time high of 68.4 million tons in June. The USDA expects India to export a record 25 million tonnes this year, with year-end stocks also projected to remain elevated. Indonesia, a key rice importer, is also holding record stockpiles as farmers accelerate planting to reduce El Niño risks. Meanwhile, stock levels in Thailand are at their highest in a decade, with fresh second-crop arrivals expected from late July.