The Chicago Board of Trade rough rice futures market saw a double-digit decline and fell to a seven-week low on Monday, pressured by USA's large US crop and stocks estimates, especially for long grain rice, traders said.
"That's what did the market in here today. It just brought in a lot of spec selling," said Jack Scoville, analyst with The Price Futures Group in Chicago.
The big numbers also deterred commercials from pricing any grain as they wait for prices to bottom out, traders said. "Commercials had been buying November they backed off," said one floor trader.
September rice closed 14 cents lower at $6.38 per hundredweight. The more actively traded November contract settled 15 cents weaker at $6.57-1/2, after dropping to a contract low of $6.50.
Sell-stops were hit in November in the range around $6.60. The intensity of sell-stop orders increased when November fell below $6.60, traders said.
Volume was moderate estimated at 551 futures and 20 options. That compared to 646 futures traded on Friday. The US Department of Agriculture raised its 2005 US rice crop estimate to 228.3 million cwt, up from 226.8 million forecast in August.
The increase spilled over to a 4.4 million increase in US 2005/06 US rice end stocks to 33.9 million. The government's long grain stocks forecast jumped by 5.4 million cwt to 26.4 million.
USDA reported late on Monday that 33 percent of the US rice crop was harvested as of Sunday, up from 24 percent the week before. In the top Rice State of Arkansas, 23 percent of the crop was off the field.
There were light deliveries of six lots posted against the September contract on Monday. A customer of First Options Chicago issued five deliveries.
They were met by strong stopping with the ADM Investor Services house account taking them all.
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