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25
Apr
2014
New Crop Rice Closes Above Key Resistance
Author: Scott Stiles, Extension Economist - Risk Management

The CME September ’14 rice futures contract finally closed above the $14.40/cwt. mark this week. After a weak start on Monday the contract managed to settle at $14.45 Friday—the highest close in 18 weeks. The weekly chart for September futures indicates a reversal higher and break out of the tight 15 cent range that prices have traded in for the last 4 weeks.

Link to weekly chart for CME September ’14 rice futures:

http://tinyurl.com/mb6lzjy

New crop basis levels remain in the -75 to -90 cent/cwt. area (-34 to -41 cents per bushel). Using Friday’s (4/25) closing price for September futures, new crop bids are generally in the range of $6.10 to $6.17 per bushel.

Chicago rice futures were supported this week on a positive U.S. Export Sales report Thursday morning and strength from the CME grain complex overall. July wheat futures gained 9 cents on the week to settle at $7.08 ¼ and September corn added 11 cents to finish the week at $5.09 ¼ . November soybeans were near unchanged from last Friday and closed out the week at $12.39 ¾.

Iraq passed on all offers in its import tender that closed April 20. They cited high prices as the reason (or a willingness to wait and watch for further price weakness in Asian markets). Net export sales by the U.S. totaled 70.2 TMT of rice in the week ending April 17; up from 44.7 TMT from the previous week. Net export sales need to average about 44 TMT per week for the balance of the marketing year to reach USDA’s export forecast.

The new crop price charts should be watched for follow-thru on this week’s break above $14.40. Traders will continue to monitor 2014 planting progress. The USDA-NASS releases weekly Crop Progress reports each Monday afternoon at 3:00 p.m. central. Also, the next USDA supply/demand report will be released on Friday May 9. The first monthly USDA estimates of 2014/15 supply, demand, and ending stocks will be provided in the May report.


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