Rough rice futures on the Chicago Board of Trade roared higher on Friday after the US Department of Agriculture projected a decline in US planted acres, traders said.
"It's good, strong price action, based off the planted and harvested acreage estimates from USDA this," said Jack Scoville, an analyst with the Price Futures Group in Chicago. "The talk on the floor was to look for rice acres to increase in the report. In fact, they went down more, and that caught a lot of people by surprise," Scoville said.
The USDA estimated 2006 US rice plantings at 2.91 million acres down from 3.38 million acres in 2005 and down from USA's March projection of 2.97 million. Also supportive was a smaller-than-expected number of first-day deliveries on the July contract.
CBOT July rice settled up 36 cents at $9.20 per hundredweight, with September up 35 cents at $9.48-1/2, after hitting a session high of $9.52. November ended up 31 cents at $9.64-1/2, and contract highs were set in January and March 2007.
Volume was estimated by the exchange at 1,704 futures and 160 options, although floor traders said the futures volume was closer to 3,000. Prices gapped higher at the open. Buy-stops were hit at several points throughout the day, and a late flurry of fund buying lifted September and November to session highs in the final minutes of trade.
ADM Investor Services was a noted buyer from on, traders said. Traders also noted commercial hedge selling and some local profit taking, with Man Financial and RJ O'Brien among the noted sellers.
Deliveries on the July rice contract for Friday totalled 69 lots, while traders had expected 600 to 800. A Man Financial customer issued 45 lots, while an ADM customer stopped all the rice.