|Rice futures plummet over GM rice concerns (18/5/2007)|
EXTRACT: Bearish stories are circulating about GMO rice building up in Arkansas elevators...
DJ CBOT Rice Review: Sharp Declines Amid Fund Liquidation
CHICAGO (Dow Jones)--Chicago Board of Trade rice futures ended deep in negative territory Friday as fund liquidation uncovered sell stops that drove prices down, traders said.
July rice dropped 30 cents to $10.11 1/2 per hundredweight, and November rice closed 27 cents lower at $10.78.
The fund selling came in early and was met by some scale down buying from ED&F Man's commercial division, a trader said. There also was local scale down buying of July, he noted.
Further fund liquidation came in, however, as the market realized it could not "get even close to unchanged," a trader said. That caused the funds to "give up" and sell more, he said.
Overall estimated volume was 2,000 contracts.
It was unclear what caused the fund sell-off, traders said. There was pressure from technical signals and potentially from concerns over the inability of the U.S. to sell genetically-modified rice, a trader said. Bearish stories are circulating about GMO rice building up in Arkansas elevators, he said.
The technical weakness may have come after the market was unable to rally after the U.S. Department of Agriculture issued a bullish report a week ago, the trader added.
Long-term, the U.S. and world supply and demand situation look bullish, an analyst said. The new USDA world forecast numbers indicate another reduction of world rice stocks to multi-year lows, he added.
In Asian markets, physical rice export prices were unchanged at high levels Friday in thin trade, with Thai offers supported by a strong baht, exporters said. While traditional buyers continue to make inquiries, most of them are deterred from making deals by high freight rates, they added. Barring any major developments next week, prices are likely to remain steady, the exporter said.
In Vietnam, prices were also unchanged at high levels, supported by strong demand in the local market as exporters are still aggressively buying paddy for shipment abroad, traders said.