Rough rice futures at the Chicago Board of Trade fell on Friday, a setback from the higher technical close on Thursday, traders said. The day's feature was spreading as firms rolled their November positions before the start of deliveries on Monday.
"Most of the volume was in the spreads rather than the outright trade," said one rice trader. November rice settled at $7.10 per hundredweight, down 4 cents, and January closed 5 down at $7.37.
The November-January spread closed at 27 cents but traded out to 29 cents, a new high, traders said.
Large rice deliveries of 700 to 1,000 against the November contract were expected on first notice day Monday due to the weakness in the cash market, traders said. But deliveries could be on the lower end of the range given the wide price spread between the November contract and the deferreds. A wide carry would pay commercials to roll positions forward, traders said.
The weakness in the cash markets amid ample supplies of rice kept the spreads historically wide. Higher interest rates also raised the cost to store rice.