As flood concerns continue in Thailand, the November contract for US rice futures settled limit up yesterday. November rice closed at $16.90 ½ per hundredweight. The daily limit at the CBOT is normally .50c; today it will be temporarily raised to .75c. The floods have already damaged crops and existing inventories causing importers to look for other options. Even if importers choose to go with other exporters like India and Pakistan there will still be a shortage in supply if there is long-term damage in Thailand. Thailand and Vietnam are accountable for more than half of the rice moving in global trade. You can see the bullish trend developing on the chart below. A close above the 9-day moving average is a positive signal. We saw a high of $18.54 on September 12th, then a steep drop for almost a month. This negative weather news out of Thailand could be what we need to test contract highs again going into the end of the year.
November '11 Rice Daily Chart
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Peter Mooses
Senior Commodities Broker
Peter's interest in trading began during a college internship with Bunge North America on the floor of the Chicago Board of Trade, where he assisted commodities traders and performed market research and analysis. Upon earning a B.A. in Economics from the University of Iowa, Peter served as an Analyst, Transaction Manager and Team Lead in the Global Trust Divisions for LaSalle Bank and Bank of America, where he managed transaction activity in multi-million dollar client fixed income and asset-bac.... Read More
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