Rough rice futures at the Chicago Board of Trade posted double-digit declines on Wednesday as commodity funds liquidated long positions, traders said. There was little news to stir much fresh interest in the markets, with spreading featured.
"With the weakness in wheat and corn, it took the rice down. Some sell-stops touched off below $10.20 in the May once we started taking out nearby support," said Jack Scoville, an analyst with The Price Futures Group in Chicago.
May rice ended 13-1/2 cents per hundredweight lower at $10.09, with the back months 10 to 11-1/2 cents weaker. An estimated 1,520 futures and 43 options traded, with 65 percent of the futures volume linked to spreads>6pThat compared to Tuesday when 290 futures and 48 options traded. UBS Warburg was featured rolling May long positions into the July contract, widening the May/July spread, which traded at 38 cents>6pUBS was also selling May futures. Both moves were likely a fund liquidating long positions, traders said. The widening May/July spread is a reflection of the weakness in the US cash markets amid ample supplies as exports are down 20 percent from a year ago.
Export business has been off since last summer when a biotech gene material was found in the US supply. It remains a source of contention for US rice buyers.
An attaches report from Sweden released on Tuesday said the Swedish importer ICA was reluctant to continue importing US rice after it found the unwanted biotech gene material LL Rice 601 in a shipment of US long-grain rice earlier this year>6pICA was one of the few EU importers that were still taking US rice. USDA on Wednesday left its weekly world market price for long-grain rough rice unchanged at $7.75 per cwt.