In late February, while most major commodities were extremely bull-friendly, Carl Brothers was wary of rice. Among the reasons: too much supply, too few exports, and too many quality concerns.

“When looking at rice production around the world, the United States is (responsible) for less than 2 percent,” said the Riceland senior vice president, market and risk management, at the Mid-South Farm and Gin Show. “That’s quite different than with corn, wheat, soybeans and cotton. So, prices for rice are really made in Asia.”

In 2004 and prior “we were carrying over 35 percent in the stocks-to-use ratio. The world was afloat in rice. Thai prices were $165 per ton. We were experiencing a loan deficiency payment — in a period I call ‘loan economics.’”

The landscape has since changed. Around 2008, “stocks plummeted” and “prices skyrocketed. Thai prices went to $1,000 per ton.”

Currently, Thai prices are around $530 to $540.

“Farmers often tell me ‘prices aren’t up.’ Well, prices are up — but you’re getting more money from the commercial market and less from government benefits because there is no counter-cyclical payment. The stocks-to-use ratio has stabilized some.”

Last summer, “we had record rice acres — particularly in Arkansas (with 1.79 million acres) and Missouri (253,000 acres). Pressure came on and U.S. prices, for the first time in some time, went below Thai prices. Immediately, in the late summer, we sold 120,000 tons to the Iraqis and displaced the Thais there.”

Unfortunately, record acreage doesn’t guarantee a stellar crop.

“The harvest was very disappointing. Not only were the field yields disappointing but the milling yields and quality were very poor. In fact, I’ve been with (Riceland) for 46 years and it’s the worst crop we’ve handled. We’ve had more difficulty with the (2010) crop with our customer base, with our milling operations, than with any crop I’ve experienced.”

Now, “we have less rice on hand because of the yields and milling yields. The rice prices rebounded. Also, corn, wheat, beans and cotton were exciting and futures were running. But the cash didn’t really follow and that’s what has created the wide basis we see today.”

But as U.S. rice prices increased, “we missed the last three Iraqi tenders. And we’re really falling off the pace needed to move this crop.”

Brothers admitted to being “pretty negative on rice. Some of the materials I’ll use this morning date back a couple of weeks when Chicago Board of Trade (CBOT) prices were much higher than today. We’ve seen a dramatic adjustment.”

Looking at balance sheets and fundamentals, “you’ll see that rice is trailing the other crops in bullishness.”