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CBOT rice

futures drop

CHICAGO: Speculative long liquidation drove the market into sell stops and CBOT rice futures closed lower with most months losing over 2/3 of the daily 30 cent per cwt daily trading limit, traders said on Tuesday.

"We liquidated a lot of spec longs today," a trader said, "May went through $9.60 (technical support) and stops were hit and the market then fed on itself."

Uncertainty about U.S. rice acreage this year and a weak tone in overseas cash markets also contributed to the spate of liquidation, they said.

The Freedom to Farm Act has triggered uncertainty.

"We'll probably be trading choppy until the acreage is known and we get a better idea of production," he said.

Traders again cited the roughly $10.00 per cwt level as a cap on the current trading range and support at approximately the $9.50 per cwt area.

Rice closed 21 to 22-1/2 cents per cwt lower, with May down 22-1/2 at $9.42-1/2.-Reuter