Rough rice futures at the Chicago Board of Trade closed higher on Friday on light speculative buying amid a surge in the corn and soybean markets, traders said. Supportive data for world rice supplies in the US Department of Agriculture's May report added strength.
However, trade was thin, continuing a week-long trend in rice futures. CBOT July rice ended up 9-1/2 cents at $10.54-1/2 per hundredweight (cwt), near resistance at its 50-day moving average of $10.55. New-crop November settled up 9 cents at $11.14.
CBOT May rice, which is in delivery, closed 12 cents higher at $10.29. There were no deliveries on the May contract. Shatkin-Arbor Inc was a late buyer of 100 July contracts, traders said. Commercials were scale-up sellers. An estimated 277 rice futures traded, down from 356 on Thursday.
The CBOT estimated rice options volume at 17 lots. The USDA projected world rice ending stocks for 2007/08 at 71.93 million tonnes, down from 75.66 million in 2006/07. If realised, the 2007/08 stocks figure would be the smallest since 1983/84.
For the US rice balance sheet, USDA forecast 2007/08 production at 183 million cwt and ending stocks at 23.7 million cwt. However, some traders said they expected the government to lower its estimate for US rice plantings in its June 29 acreage report.
The government's adjustments to its 2006/07 rice figures were viewed bearish. USDA raised 2006/07 rice ending stocks to 37.4 million cwt, mostly due to a 5-million-cwt cut in exports. On the export front, Iran is negotiating to buy up to 300,000 tonnes of Thai rice in a government-to-government deal, Thai traders said.
Meanwhile, South Korea, home to some of the world's most expensive rice, said it was considering a change to its laws to allow exports of the grain for the first time in 60 years. South Korea is struggling to cope with bumper harvests from its heavily subsidised rice farmers while increasingly wealthy consumers turn to other products such as noodles and bread.
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