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BUSINESS: Chicago Board of Trade rice futures dropped

------------------------------- GENET-news -------------------------------
TITLE:  DJ CBOT Rice Review: Sharp declines amid fund liquidation
SOURCE: Dow Jones Newswires, USA
AUTHOR: Tom Polansek
DATE:   18.05.2007

DJ CBOT Rice Review: Sharp declines amid fund liquidation

CHICAGO (Dow Jones)--Chicago Board of Trade rice futures ended deep in
negative territory Friday as fund liquidation uncovered sell stops that
drove prices down, traders said.

July rice dropped 30 cents to $10.11 1/2 per hundredweight, and November
rice closed 27 cents lower at $10.78.

The fund selling came in early and was met by some scale down buying
from ED&F Man's commercial division, a trader said. There also was local
scale down buying of July, he noted.

Further fund liquidation came in, however, as the market realized it
could not "get even close to unchanged," a trader said. That caused the
funds to "give up" and sell more, he said.

Overall estimated volume was 2,000 contracts.

It was unclear what caused the fund sell-off, traders said. There was
pressure from technical signals and potentially from concerns over the
inability of the U.S. to sell genetically-modified rice, a trader said.
Bearish stories are circulating about GMO rice building up in Arkansas
elevators, he said.

The technical weakness may have come after the market was unable to
rally after the U.S. Department of Agriculture issued a bullish report a
week ago, the trader added.

Long-term, the U.S. and world supply and demand situation look bullish,
an analyst said. The new USDA world forecast numbers indicate another
reduction of world rice stocks to multi-year lows, he added.

In Asian markets, physical rice export prices were unchanged at high
levels Friday in thin trade, with Thai offers supported by a strong
baht, exporters said. While traditional buyers continue to make
inquiries, most of them are deterred from making deals by high freight
rates, they added. Barring any major developments next week, prices are
likely to remain steady, the exporter said.

In Vietnam, prices were also unchanged at high levels, supported by
strong demand in the local market as exporters are still aggressively
buying paddy for shipment abroad, traders said.

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