Rough rice futures at the Chicago Board of Trade closed sharply higher on Wednesday on short-covering ahead of key US government crop reports on Friday, traders said. May rice ended up 25 cents, or 2.5 percent, at $10.05 per hundredweight. July was up 24 cents at $10.35 and new-crop November closed up 25 at $10.94.
Volume was estimated by the exchange at 761 rice futures and 450 options. The market rallied late in the session as light fund buying in the November contract triggered short covering by local traders and small speculators, traders said. Earlier, commercial buying from Man Financial and supportive moves in options buoyed prices.
Firms were also positioning ahead of the US Department of Agriculture's US planting intentions report, due on Friday. Analysts expect US rice seedlings to drop in 2006, possibly by as much as 10 percent, as farmers switch to high-priced corn. Lingering issues related to discovery of a biotech gene in some US rice supplies could also limit plantings. The USDA on Wednesday said it left its weekly world market price for long grain rough rice unchanged at $7.75 per cwt.