Rough rice futures on the Chicago Board of Trade soared on Tuesday on follow-through technical buying after on Monday's strong close, traders said.
"The trends turned up over the last couple days and that really supported the market," said Jack Scoville, vice president with The Price Group in Chicago. The July contract continued climbing on Tuesday after surpassing $9 per hundredweight a key resistance point on Monday.
The spot price is at 1-1/2 year high. Buy stops were hit, driving the market higher on the open. The market gained strength late in the session, closing at the day's highs. Contract highs were made across the board.
July rice closed 21-1/2 cents higher at $9.21-1/2, after touching a high of $9.23. The back months through January 2007 ended 10 to 16 cents higher. Commodity funds were the big buyers. ABN Amro, Fimat USA and Man Financial were the featured buyers of July, traders said.
Commercial sales surfaced when the July contract hit $9.10. There was also a commercial sale in new-crop November by Rosenthal Collins and RJ O'Brien. US cash rice markets were quiet, with basis levels historically weak due to slow demand, traders said.
And, the young US rice crop was in good shape. The US Agriculture Department on Monday rated 57 percent of the rice crop as good to excellent, down from 64 percent the week before but near the 58 percent rating in 2005.
Eighty-eight percent of the crop was planted as of Sunday, versus 92 percent for the five-year average.
After the close, USDA raised its weekly world market price for long grain rough rice by 10 cents to $6.60 per cwt.
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