The spot Chicago Board of Trade rice contract fell to a 4-1/2 month low on Thursday on lingering concerns about export business after Mexico halted several US rice shipments due to biotech concerns, traders said.
"We're still reacting to the Mexican news," said one rice broker. May rice closed 9-1/2 cents lower at $10.22 per hundredweight, after sliding to $10.17 its lowest price since late October 2006.
The back months through November 2007 settled 9 to 15 cents weaker. Catkin was a featured seller, likely for a commodity fund liquidating a long position, traders said. Estimated volume was 2,587 futures and 184 options, compared to 2,710 futures and 129 options that traded on Wednesday. The market tumbled on Wednesday on reports that US rice shipments were being held up at the Mexican border, pending GMO certification, traders said.
But USDA announced on Thursday that the shipments were later let through without any testing, saying Mexico had dropped plans to implement any testing right away. The agency is also in talks with Mexico regarding testing procedures and tolerance levels for genetically modified material.
Worries that export business with Mexico, the No 1 rice customer of the United States, could be hampered sent shivers through the US rice industry. Already, US rice exports are off 22 percent from a year ago as business has been hurt since the discovery of a biotech gene material LLRICE601 was found in the US rice supply last summer.
Weekly export data was also dismal. USDA reported that last week's US rice export sales were only 21,100 tonnes 58 percent below the week before. Estimated volume was 2,350 futures and 84 options. That compared to 443 futures and 78 options that traded on Tuesday.