Chicago Board of Trade rough rice futures closed firm on Wednesday after a series of technical moves that pushed the market into buy stops and the day's highs, traders said.
May rice, now in delivery, ended 8 cents higher at $8.33 per hundredweight. The more actively traded July contract closed 8-1/2 cents up at $8.54-1/2, near the day's high of $8.56. "When the July contract climbed to $8.50, buy stops were hit," said one rice broker. Fimat USA, Rand Financial and ABN Amro bought the July contract at $8.50 and above, which was likely fund speculative buying, traders said. There also were supportive moves stemming from the options pit that helped the July contract rally.
Speculators were buying $9 and $9.20 July call options. An estimated 634 rice futures and 215 options. That compared to 375 futures that traded on Tuesday. US cash markets were slow amid ample supplies. But analysts expected USA's crop report on Friday to show 2006/07 US rice end stocks shrinking significantly from the 31.5 million cwt in 2005/06 due to a 12 percent drop in the planted acre forecast.
In world news, the Philippine government said on Wednesday it bought 375,000 tonnes of rice from Vietnam, which was expected to get the business. There were 45 deliveries posted against the May contract on Wednesday. A customer of ADM Investor Services stopped 43 lots.
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