Rough rice futures at the Chicago Board of Trade ended higher on Tuesday on an oversold bounce, traders said. The rice market came under severe pressure on Monday, with September falling the 50-cent trading limit as funds actively liquidated long positions, traders said.
The nine-day relative strength index for September dipped to 27 on Monday, below the 30 level viewed as technically oversold by CBOT traders.
CBOT rice futures ended 2 to 3-1/2 cents per hundredweight higher in the front three months, with September up 3-1/2 at $7.18-1/2. Volume was light, estimated at 211 futures, down from Monday's 502 lots.
Options trade was pegged at 94 lots. Commercial were net buyers of futures and sellers of in the money puts, which gave the market an added lift, traders said. Firms were selling November and January $9 put options.
Ongoing worries about a possible cut in India's rice crop due to poor monsoon rains is supportive. But a big US rice crop in the offing remains bearish, traders said.
After the close, the US Department of Agriculture said it raised the weekly world price for long grain rough rice by 14 cents to $6.06 per cwt.
Comments
Comments are closed.