Rough rice futures at the Chicago Board of Trade closed lower on Thursday as the government's bigger US rice production estimate issued before the open ignited speculative selling, traders said.
The market also shrugged off the US Agriculture Department's report that weekly exports were at a marketing-year high of 198,900 tonnes, which included a rice sale last week to Iraq of 65,000 tonnes.
"The exports were not enough to hold off the bearish news of the report," said one rice broker. January rice fell more than 25 cents per hundredweight under fast-market conditions.
Sell-stops were triggered from $9.91 to $9.75, with the heaviest amount hit at $9.91 followed by $9.90 and $9.85. It recovered from its low as commercial pricing surfaced, traders said. January rice closed 17-1/2 cents lower at $9.81, after falling 26-1/2 cents to $9.72. Thinly traded November rice ended 13 cents down at $9.75.
Clayton was a featured seller on sell-stops while Man Financial and RJ O'Brien were noted commercial buyers, traders said. Volume was large estimated 1,144 futures and 142 options, down from the 324 futures that traded on Wednesday. USDA raised its 2006/07 US ending stocks estimate by 1.1 million cwt to 34.5 million cwt, reflecting an unexpected increase in its production forecast.
However, the government left its usage forecast unchanged, with traders anticipating a possible drop in consumption. There were no November deliveries on Friday. In global news, rice prices in the No 1 rice exporting country of Thailand are expected to drop more over the next week as its main crop comes to market, Asian traders said. The domestic 100 percent broken rice price was down $8 a tonne at $282 from a week, falling in line with the post-coup government's purchase prices, which are about 10 percent lower than the ousted government had set.
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