By Miho Yoshikawa
Reuters
April 24 2008
TOKYO, April 24 (Reuters) - U.S. rice futures struck a new lifetime peak above $25 in Asian trading on Thursday, as worries about possible supply shortages continued to plague the world's second-biggest food grain crop.
Chicago Board of Trade July rough rice futures surged to a record high of $25.010 per hundredweight on worries over scarce global supplies of the grain.
CBOT rice is up about 80 percent so far this year. The July contract surpassed the previous record of $24.85 touched in Chicago on Wednesday, where it later closed at $24.82.
It was trading at $25 as of 0400 GMT on Thursday.
"I don't think rice is going to get cheaper," said Koji Suzuki, a market anaylst at Kazaka Commodity Co Ltd.
"I think it will be hit by profit-taking selling along the way, but prices will head towards $30," Suzuki said.
Thailand's benchmark 100 percent B grade white rice was quoted at a record high of more than $1,000 per tonne, with traders and exporters expecting the food staple to rise further due to tight supply.
Rice has been hitting successive new peaks due to worries about supply shortages that have led to political unrest and export restrictions.
Brazil temporarily suspended rice exports on Wednesday to safeguard domestic supplies and keep prices of the basic foodstuff stable.
The Latin American country, which is not a major global supplier, followed in the footsteps of top exporters, such as India and Vietnam, in imposing export curbs. India was the second biggest rice exporter in 2007, and Vietnam the third largest.
Grain traders and analysts say, however, that CBOT rice futures are more of a speculative tool than a "hedging" or financial vehicle like CBOT's other commodities -- corn, wheat or soybeans -- that reflect world supply and demand.
The United States, which annually grows about 6 million tonnes of rice, only accounts for a small percentage of global production of 425 million tonnes.
World organisations have warned food-producing countries against imposing export curbs, which could lead to a worsening of the international food crisis.
In an interview on Wednesday, EU Trade Commissioner Peter Mandelson said: "If we restrict trade, we're simply going to add food scarcity to the already large problems of food shortages that exist in different countries."
In other grains, CBOT May corn futures were at $5.90 a bushel, hovering near Wednesday's settlement of $5.87-3/4.
Wheat continued to slide, pressured by prospects of a large wheat harvest starting in the Northern Hemisphere in less than two months. It hit a five-month low the previous day.
CBOT May wheat was at $8.11-½ per bushel, down from the previous day's settlement of $8.17-3/4.
CBOT May soybeans were trading at $13.73 versus $13.72, the previous day's Chicago close. (Reporting by Chikafumi Hodo and Miho Yoshikawa; Editing by Ben Tan)