Chicago Board of Trade rough rice futures ended higher on Thursday on follow-through speculative buying, with buy-stops hit near the day's high, traders said. "We've started to move out of the range we've been in ... it brought in new speculative buying," one rice broker said.
May rice, now in delivery, ended 4 cents higher at $8.37 per hundredweight. Open interest has shrunk to 14 contracts as of the open, down 42 from the day before.
The more actively traded July contract closed 6 cents up at $8.60-1/2. The July contract approached its 50-day average of $8.65 per hundredweight, but hit resistance at $8.63.
The first wave of buy stops were triggered at $8.56 to $8.58 in July. Another round of buy-stops surfaced at $8.60 to $8.63, traders said. Commercial selling by Man Financial and R.J. O'Brien was uncovered when the July contract reached $8.60. That lent pressure and cooled the speculative buying.
An estimated 635 rice futures and 90 options traded. That compared to 712 futures that traded on Wednesday. The market climbed despite a disappointing weekly export sales tally.
The US Agriculture Department reported that 31,500 tonnes of US rice were sold for export last week, 25 percent under the four-week average. The day's moves came ahead of USDA's first US 2006/07 rice end stocks estimate to be issued on Friday.
Analysts expect US rice end stocks to shrink from the 31.5 million cwt in 2005/06 due to a 12 percent drop in the planted acreage forecast. There were no May deliveries on Thursday morning.
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