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CBOT rice ends lower on farmer sales, correction

CHICAGO: Rough rice futures at the Chicago Board of Trade ended lower on Friday, burdened by corrective setback and increased farmer selling in the wake of sharp advances Thursday, traders said.

CBOT rice settled 3 to 10-1/2 cents per hundredweight (cwt) lower, with March down 10 at $5.58.

Traders said the market was due for pullback after surging 20 cents or more on Thursday, but noted that technical patterns were stronger after Thursday's action, which traders termed a "breakout" session.

March rice pushed above a resistance area around $5.55 and closed at $5.68. Further resistance lies around $6.05 to $6.07. On Dec. 30, March rice fell as low as $5.33, but has since rebounded.

Fundamentally, the market's relatively low prices appeared to have stirred some fresh demand, though overall exports were relatively sluggish and supplies ample after a record US crop.

"Fundamental numbers are very negative, but at the lower end (of the recent trading range), this market has value," one CBOT trader said. "It held because we had demand for US rice."

Traders noted some farmer selling near Friday's highs. Rosenthal Collins was a seller early, and Term Commodities and E.D. & F. Man International were also sellers, traders said. Speculative buying was noted.

In export news, the US Department of Agriculture's weekly export sales report Friday listed net US rice sales for the week ended Jan. 13 at 69,900 tonnes, 17 percent under the previous week and 16 percent under the four-week average.

Rice futures volume in Friday's pit session was estimated by the CBOT at 1,000 contracts, compared with 2,021 Thursday. -Reuters