US Rice Jumps to Record High on Supply Fears
U.S. rice futures rose to a fresh all-time high on Wednesday on worries about supply shortages which have triggered political unrest and export restrictions designed to protect dwindling domestic stocks.
Chicago Board of Trade July rough rice futures hit a record high of $24.745 per hundredweight and stood 1.5 percent or 36 cents higher at $24.56 in early European trading.
Prices have risen about 68 percent since the start of 2008.
"Some of the main rice producing countries have imposed export curbs ... and this has combined with low global stocks to drive rice higher," said Kenji Kobayashi, a grains analyst at Kanetsu Asset Management in Tokyo.
"Rice has been hitting successive records. It's neared $25 and I think $30 is now on our horizon," Kobayashi said.
Trade bans have been put in place by India, the world's second largest rice exporter in 2007, and Vietnam, the third biggest, in the hopes of cooling domestic prices of the staple food.
Thailand is the largest exporter.
The export curbs have been criticized by the Asian Development Bank, which said Asian governments were over-reacting to surging food prices by resorting to market-distorting measures.
The bullish mood was reinforced by news that Japan had failed to buy any rice at an import tender held on Tuesday either because prices were too high or there were too few participants, a trade source said.
Exporters also said Thai 5 percent broken grade white rice could rise more than 30 percent to $1,300 per ton by May due to strong demand from the Philippines.
CBOT soybean prices also rose with the May contract up 7-3/4 cents at $13.82-1/2 a bushel, boosted by bullish export prospects and jitters about the Argentine labor situation.
"Soybean prices have rebounded following a sharp contraction in March as the U.S. supply situation appears less assured than previously expected," Rabobank commodity analyst Luke Chandler said in a report on Wednesday.
"Higher exports due to the Argentinean stoppages together with strong competition fron corn for available acreage and robust demand conditions have provided soybeans with a more optimistic price scenario in 2008," he added.
Argentine President Cristina Fernandez on Tuesday called for calm as talks with farm leaders grew more tense, raising expectations in financial markets that farmers might go back on strike.
Wheat prices, however, were lower with a favorable crop outlook sparking a significant drop in prices during the last few weeks from record levels reached earlier this year.
China's top wheat growing provinces of Henan and Shandong are likely to have a bumper winter wheat harvest following recent rains, the Xinhua news agency said, quoting local agricultural authorities.
CBOT May soft red winter wheat futures were down 4 cents a bushel at $8.47-3/4 while milling wheat futures in Paris also eased with November off 2.25 euros at 197.00 euros a ton.
CBOT corn prices held steady with May down a marginal 1/4 cent at $5.94 a bushel.