Chicago Board of Trade rough rice futures dived on Wednesday on a technical setback after the rally on Tuesday, traders said. March rice closed 10 cents lower at $8.29 per hundredweight, and may settle 12-1/2 cents weaker at $8.52-1/2 more than offsetting on Tuesday's strength. Volume was heavy estimated at 1,132 futures and 42 options.
That compared to 432 futures that traded on Tuesday. Sell stops were first hit below $8.60 in May, with the heaviest amounts below $8.55, traders said. The bulk of the stops were linked to long liquidation by commodity funds, traders said.
But there was also active commercial selling by Man Financial. The May/July spread traded at 25 cents with Rosenthal Collins noted trading May/July. Traders expected the US Agriculture Department to report a strong weekly export sales tally near 100,000 tonnes on Thursday.
"There's the expectation that we'll see catch-up sales to Japan and Costa Rica that the market was expecting to see last week," one rice broker said.
March deliveries were light on Wednesday at nine contracts, which were met by commercial stopping. The ADM Investor Services house account took all nine lots.
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