Rough rice futures at the Chicago Board of Trade rose on Thursday on a recovery bounce after on Wednesday's slide to a 1-1/2 year low, traders said. An impressive weekly export sales tally helped boost the market on the open. The strength held throughout the session with prices closing at the highs. The rice market settled 10 to 14-1/2 cents per hundredweight higher, with March up 14-1/2 cents at $6.63-1/2.

The US Department of Agriculture said on Thursday that last week's rice export sales were at a marketing-year high of 119,500 tonnes.

That was more than double the week before.

The market was poised for a technical bounce, with the nine-day relative strength index for March rice closing at 29 on Wednesday, below the 30 benchmark viewed as a technically oversold market.

The RSI bumped up to 44 on Thursday's close. Rice opened higher amid speculative buying by commission houses including Reface, Man Financial and ADM Investor Services, traders said. The climb was met by commercial hedge pressure as farmers sold rice as the market bounced, traders said. "Farmers have been selling rice under the (government) loan rate that holds the amount the market can rally," one CBOT rice trader said.

Firms continued to roll their March positions before February 28 first notice day for futures deliveries. Prudential Securities and Man Financial were among the feature spreaders.

Volume was large estimated at 1,018 futures and 19 options. That compared to 561 lots traded on Wednesday.

Copyright Reuters, 2005