Chicago Board of Trade rough rice futures rallied on Friday, gapping higher on the open with the May contract reaching a two-week high after the USDA projected a sharp decline in US rice acreage, traders said.
May rice was up 21 cents at $8.57 per hundredweight by 11 am CST (1700 GMT). New-crop November was up 15 cents at $9.17. Supportive moves stemmed from the options pit where firms were buying $9 may and $9 July call options, traders said.
The government forecast US rice seedlings below 3.0 million acres at 2.972 million acres down 12 percent from 2005. Most traders expected plantings to be down about 8 to 10 percent. Soaring fertiliser and fuel costs has made rice expensive to plant and was discouraging farmers from seeding many acres to rice, traders said.
Prices also found support in the government's report on March 1 rough rice stocks. USDA put that figure at 111 million cwt, down 6 percent from a year ago. However, long grain rough rice stocks were up 6.114 million cwt from a year ago.
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