Rough rice futures on the Chicago Board of Trade closed sharply lower on Friday, with most months falling the daily limit after a monthly US crop report showed rising domestic rice inventories, traders said.
USDA in its July supply/demand report raised its estimate of US 2007/08 (old-crop) rice ending stocks to 26.1 million hundredweight (cwt), up from 22.1 million in June. USDA also raised its estimate of US 2008/09 (new-crop) rice ending stocks to 21.6 million, from 17.1 million in June.
"The fact is, supplies of rice are increasing, not decreasing," said Neauman Coleman, a rice analyst and broker in Brinkley, Arkansas. Spot CBOT July rice, which is in delivery and trading without limits, fell $1.15 to settle at $19.80 per cwt. September fell the 50-cent limit to close at $17.90 and November fell 50 cents at $18.17-1/2.
CBOT daily rice limits widen to 75 cents starting with the Sunday night electronic session. USDA raised its 2008/09 US rice production estimate to 205 million cwt, from 197 million in June. The government raised its 2008/09 world rice production estimate slightly, to 431.7 million tonnes, from 431.4 million in June.
Overnight, there 191 deliveries posted against the CBOT July contract which were met by a strong stopper, as an RJ O'Brien customer took 184 lots. Estimated futures volume was light at 334 futures and five options.
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