Rice futures have rallied only $1.50 from its lows just six weeks ago although severe drought reportedly threatens Asian rice production in SE Asia. Rice futures are up .185 cents today currently trading at $11.40 (per cwt) at the Chicago Board of Trade.
Adverse dry weather is said to be affecting the rice production from SE Asia and west to India thanks to the El Nino phenomena. Some officials say that if it weren’t for last year’s overwhelming surplus, then rice prices would be impacted much more.
“Despite El Nino hurting crops for the largest exporters of rice in the world, there has been little price increase,” said Nathan Childds, an agricultural economist with the US Department of Agriculture, sharing his fundamental assessment of the rice futures market. Childs added, “Unlike other grains, rice (futures) is not traded on a global exchange, and many purchases are between governments or private parties.”
The trend for rice futures has turned “up” in the latter part of last month. I would expect rice futures to at least test its late March/early April lows before much higher prices potentially could be seen, but we are all enjoying low rice prices since its record highs (of near $33.30) in 2008.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
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