20000224

CBOT rice ends lower as rice stocks stay plentiful

CHICAGO: Rough rice futures at the Chicago Board of Trade closed lower on Tuesday on persistent reminders of the large supply of rice with commercial and local selling leading the way down, traders said.

Rice closed 4 to 5-1/2 cents per cwt lower, with March down 4 at $5.39.

"It's the same old song, there's too much rice around and there aren't any weather problems that I can see," a trader said.

Rice stocks in the US remain abundant plus there continues to be evidence that rice supplies worldwide continue to keep price rallies in check.

For example, foreign rice is still arriving in Indonesia, threatening to further reduce prices while corn imports are expected to resume in April after the end of the harvest, traders in Jakarta said on Tuesday.

Traders said the price of locally grown rice had fallen to 2,300 rupiah/kg compared with 2,500 rupiah/kg a few months ago because imported rice was much cheaper at 1,800 rupiah per kg.

"Early they were just getting out of the March and there was a little spec buying in May," a CBOT rice trader said referring to the early activity in CBOT rice futures trading Tuesday.

Traders were beginning to step up their pace of liquidation in the March contract before the Feb. 29 first notice day for deliveries on the CBOT March contracts.

Locals were noted sellers of March and May and "(Term Commodities, the marketing arm of commercial Louis Dreyfus, Corp.) early started selling above the 50 day moving average in March and that put a damper on things," the trader said.

The March/May was actively traded at 29 cents, premium May throughout the day and there was some trading at 29-1/2 cents, traders said.

Rice futures volume was estimated by the CBOT at 1,500 lots, above the 452 lots traded Friday.-Reuters