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CBOT rice up sharply to 5-week high on technicals

CHICAGO: Rough rice futures at the Chicago Board of Trade climbed sharply on Thursday as heavy technical buying sent the market to the highest levels in over five weeks.

CBOT rice settled 20 to 25 cents per hundredweight (cwt) higher, with March up 21 at $5.68, the contract's highest close since $5.69 on Dec. 13.

January futures expired Thursday, ending up 23 cents at $5.52.

Early in the session, March briefly rose the 30-cents-per-cwt daily trading limit, as the market's move above some key chart levels triggered widespread stop-loss buying, traders said. Buying accelerated above the $5.55 to $5.60 level.

Stop-loss buying totalled 350 to 400 contracts in March and 30 to 70 in May, traders said.

Traders said Thursday's gains were largely technical in nature, as fundamentals remained solidly bearish. The US is coming off a record rice crop, world prices have been soft and export demand has been unimpressive.

However, Thursday's surge may have partly reflected concerns over the southern hemisphere's rice crop, specifically Argentina, traders said. Current price levels may not hold enough "weather premium" to account for potential crop problems, traders said.

E.D. & F. Man International was a seller during the sharp price run-up, traders said, and Term Commodities sold near the highs.

Rice futures volume in Thursday's pit session was estimated by the CBOT at 600 contracts, compared to 515 Wednesday.-Reuters