Most Thai rice futures dipped on Friday as players sold nearby contracts to avoid risk while some speculators took short-sale positions on distant contacts, brokers said. Overall volume rose as 110 contracts of 5 percent white rice were traded compared to Thursday's 88. The March contract ended steady at 10.60 baht per kg with the number of contracts traded falling to 27 from 57. Open interest for the March contract fell to 210 contracts from 237.

"Most players wanted to offset March contracts to avoid delivery," said one broker.

"But many bargain-hunters turned to speculated on deferred contracts as they took short-sale positions on them, expecting the prices to go lower."

The September contract dropped to 10.42 baht per kg from 10.44 baht with 13 contracts traded. No September contracts were traded on Thursday.

Open interest for the September contract rose to 43 contracts from 30 on Thursday.

Brokers said they expected the fall in prices to run out of steam, backed by high physical prices of Thai five percent white rice at 10.55-10.60 baht per kg.

Thailand, the world's largest rice exporter, started rice futures trading on August 26.

Copyright Reuters, 2005