Posts Tagged ‘flood’
Rice Rallies on Investor Bets and Discount to Other Grains
The rice futures rallied today as the investors bet that the huge discount of this commodity’s prices compared to other grains will spur the demand and growth. As both wheat and corn may seem overbought to many investors to rally further, the funds are turning their heads to rice, which is currently the worst performing of all grains this year.
The floods in Pakistan and the drought in Thailand also contribute to the better outlook of the rice futures at least for the next few weeks. While wheat rose by about 100 percent since June this year, rice dropped about 1/4 of its price, resulting in the widest price gap since early 2008 for these two commodities. The traders believe that the current price may go up by almost a third by the end of the year and suggest looking at supply as the main moving factor. If the weather continues to press on, the rice will continue to rally.
September rice futures is trading near $11.27 per 100 pounds as of 15:37 GMT on CBoT. It rose from $10.94 or more than 3 percent today.
Wheat at 13-Month High on Droughts, Floods, Stockpiles Concern
Wheat reached 13-month high levels today as the weather troubles continue to remain a major concern of the main commodity suppliers across the world. It also looks unlikely that China or India will sell from their wheat stockpiles to satisfy the global demand.
Floods in Canada and droughts in Australia, France, Kazakhstan and Russia threaten the grain production in those regions. According to the market researchers, the wheat production in Western Australia is to fall by 9.5 million ton this year. Russian exports may be decreased by the government limits this year as the crops are falling there.
Despite the fact that the world consumers will have to buy more grain from the southern hemisphere this year, such big holders of the wheat stockpiles as China and India will probably refrain from parting with them. Analysts believe that the prices will stop rising so fast only if some other exporters will cover the supply deficit. Technical analysis factors support the bullish point of view.
Wheat went up from $586.25 to $599.50 as of 16:33 GMT on CBoT today, a spike to $609.75 was recorded earlier.
