We are in a farming price depression as I write this. Almost all things grown with a futures market are going down in price. If you were trading ag for profit, why wouldn’t you be short the grain markets?

The trend is your friend. I would not argue with the bears, but rice may be dancing to a different animal. Some of the eight factors and turning points listed below, which point to higher rice prices, apply only to rice, and some apply to all ag products:

1. Stocks in the hands of the five major rice exporters are at their lowest level to world rice trade in the last six decades, and world rice trade is trending higher.

2. Two major rice exporters have disastrously low levels of water resources per capita: India and Pakistan. The U.S. is not a poster child for good water management either, but has seven times more water resources per capital than these two countries that export about 15 million metric tons or one-third of traded rice per year. Their water metrics are dropping by 1 percent to 2 percent per year. That is a dire trend over the next two decades.

3. If India cuts back its rice exports as it has its cotton exports, the world rice price would double over night. India would export less of its scarce water to boot.

4. China has 65 percent of the world’s rice stocks now, and apparently has been piling up rice for the last 11 years. I say apparently because technically grain stocks are a military secret there. Those who know do not tell and those who tell do not really know for sure.

Why is China importing 5 million to 7 million metric tons of rice per year, increasing production and stocks and selling off very little in the world market? One answer is that their price inside the country is about $18 per hundredweight; no one would buy their rice without massive export subsidies in the global market that is $7 (India) to $12 (Vietnam) per hundredweight.

If China drops its domestic rice support price, it must contend with labor costs rising at 15 percent per year, and tiny rice farms with polluted soils and water and not much of that either. Also, if it dropped its domestic price to farmers to Vietnamese prices — much less Indian rough prices — it would import a huge share of world rice trade that could easily double the world price.

5. The global corn yield is now 30 percent higher than rice yields, and its upward trend could be 50 percent higher in the next five years. Is that bearish on rice, which suffers from a GMO ban?

6. Long-grain rice, like cotton, cannot easily be grown above the Bootheel of Missouri. If you extend that line across the world, most of the world cannot grow rice north of that latitude. You can grow high corn yields in Canada now. You can grow oats, wheat, soybeans, canola, and sunflowers very far north, but not long grain rice. Rice is latitude-challenged.

6. Our weather consultant, www.commoditywx.com believes we are entering a period of extreme cold winters that could last a decade or longer due to a decline in sunspot activity. If the northern latitude growing season is reduced, what would that mean for rice? Work I have done suggests that global warming is kind to rice; but wet, cold growing seasons decimate rice in North and East Asia.

7. So, exporter stocks are historically very tight. What happens if trade is disrupted by a withdrawal of the U.S. as the world’s oceanic police force? I say the answer is stockpiling.

8. The U.S. dollar went down in value in 2017, making the export price of all grains and cotton, rice included, cheaper to foreign buyers. This trend could continue in 2018. That is good news for demand for U.S. rice on the global market.

So, I watch the charts closely and I see these eight turning points ahead for rice. I am still a grain price bear, but I am not hibernating. I am watching what is going on from the mouth of my dismal economic cave and sniffing the market for a more positive price outlook.