LONDON — U.S. rice futures soared around 5 per cent on Friday boosted by prospects of reduced output from cyclone-devastated Myanmar, while corn climbed to a record high as excessive rains slowed U.S. plantings.
“Supply worries have intensified with the Myanmar cyclone and the market is likely to continue to rise and probably test its record highs soon,” a Seoul trader said.
U.S. rough rice futures for July delivery rose 5.1 per cent to $23.495 (U.S.) per hundredweight in a sixth consecutive daily gain, while September rose 4.3 per cent to $21.215.
Rice prices came off their highs last week after hitting a record of $25.07 on April 24 as Asian prices stabilized on prospects of increased supply from Thailand, the world's largest rice exporter.
But prices started rising again this week, because Myanmar is likely to become a net rice importer, with trade sources saying thousands of tonnes of rice that were in storage in the country were lost and thousands of acres are now not plantable.
The market has also derived support from Malaysia's purchase of 500,000 tonnes of rice from Thailand.
U.S. corn futures set new peaks, boosted by planting delays which are likely to cut production and sharply reduce stocks.
The May contract rose to $6.25 a bushel, up 6-1/4 cents and a new record high for the spot contract.
An all-time high for corn of $6.77-3/4 was set for the July 2009 contract.
Further fuel for the market's advance may be provided later on Friday when the U.S. Department of Agriculture issues its first estimate of U.S. ending stocks for 2008/09.
An average of analysts' forecasts saw a drop to 685 million bushels, about half the 1.283 billion estimate for 2007/08 ending stocks issued by USDA in March.
Dealers said a rise in crude oil prices was also supportive for corn, which is used extensively in the United States to produce biofuel ethanol.
“Crude oil being so high does help (corn),” one European dealer said.
U.S. wheat prices also rose, buoyed by gains in corn, with some private forecasts for a frost threat next week in the southern U.S. Plains wheat belt added support.
CBOT July soft red winter wheat futures rose 15-1/4 cents to $8.37-1/4 a bushel.
European wheat prices also rose with November milling wheat in Paris up 2.00 euros at 201.50 euros a tonne while November feed wheat in London stood 1.00 pound higher at 140.00 pounds a tonne.
Global inflationary pressures and weakness in the euro compared with the dollar boosting the competitiveness of European exports supported the market, traders said.
A penchant by investors to favour commodities over other financial assets was another positive factor, they added.
“The context is more favourable but the volumes aren't there,” said one European trader, pointing to moves by many market players in France to enjoy a long weekend following a national holiday on Thursday and ahead of another one on Monday.
U.S. soybean futures were higher, supported by gains in both corn and crude oil prices with July up 16-1/4 cents at $13.26-1/4 a bushel and European rapeseed also rose sharply.
“Rapeseed is the star performer today,” said a second European trader. Euronext rapeseed futures have risen for nearly a week, boosted by the rising price of oil and oilseeds on the global stage.
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