Chicago Board of Trade rice futures rallied to a four-month high on Tuesday as heavy sell-stops were triggered amid further confirmation that Iraq was buying US wheat, traders said. "Three hundred buy-stops were hit between $7.60 and $7.75 in July," one rice trader said. The speculative buying was triggered by reports out of Baghdad reiterating that Iraq bought at least 300,000 tonnes of American rice. "It was just more confirmation," said Milo Hamilton, a rice analyst with nopotatoes.com. Some traders have had doubts over how much of the US rice would actually be shipped.
However, Iraq recently made it easier for sellers to deliver grain, allowing for delivery of rice to Iraq ports instead of locations inside the war-torn country.
The front two months closed 22 cents higher, with may rice at $7.60 per hundredweight and July at $7.75, climbing to a session high of $7.79. Commercial hedge pressure, likely farmer sales, surfaced as the market rallied putting a cap on prices, traders said.
Revco and RJ O'Brien were featured buyers while Man Financial was a noted seller, traders said. Volume was large estimated at 1,462 futures and 145 options.
There were 317 deliveries posted against the May contract on Tuesday, with a Fimat Futures customer posting 218 lots. But they were met by strong stopping with a customer of Tenneco taking 276 lots.
The US Department of Agriculture said late on Tuesday that it left the world market price for rough rice unchanged at $6.34. US rice planting was on track. USDA late on Monday reported that 65 percent of the US rice crop was planted as of Sunday, even with the five-year average. In the top Rice State of Arkansas, 76 percent of the crop was planted, up from 51 percent the week before.
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