CHICAGO -- Soaring global demand for food drove U.S. rice futures up 2 percent to the maximum allowed in one day Tuesday.
"Rice is up on speculative buying in anticipation that there is going to be a world food shortage," said Terry Reilly, analyst for Citigroup.
Weather, labor woes and big demand for food and fuel drove corn and soy markets up about 2 percent and 5 percent, respectively.
Chicago Board of Trade rice futures climbed more than 2 percent and record highs were in sight as panicky buying of food and fuel-based commodities continued, led by record highs in crude oil at nearly $120 per barrel.
Rice for May delivery ended up its daily allowed limit of 50 cents per cwt at $23.85, just below the record high for May of $24.355 that was set Friday.
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Asian demand for rice continues strong and there is talk some owners of rice stocks were hoarding supplies, further lifting global rice prices to record peaks.
Japan, in a regular weekly tender Tuesday, failed to buy any rice because there were too few bidders or prices were too expensive, a trade source in Tokyo said.
In the United States, James Sinegal, chief executive officer of Costo Wholesale Corp, a warehouse club, said Tuesday that he had seen some customers buying "unusual" quantities of rice and flour and some stores had put limits on sales of those items.
"We've tried to modify those, so if somebody is buying a reasonable quantity, we let them have it," Sinegal said.
RAINS THREATEN U.S. CORN PRODUCTION
Wet weather is threatening American corn production and soybean markets were boosted by labor problems in South America, the No. 3 global soy exporter and the biggest exporter of soymeal and soyoil.
"There are only two things going on ... the Argentine farm strike and the weather," said Charlie Sernatinger, analyst for Fortis Clearing Americas.
Chicago corn for May delivery ended 14 cents per bushel higher at $5.94-1/4 per bushel.
The U.S. Department of Agriculture said that American farmers had planted only 4 percent of the 2008 corn crop, well below average seeding rates of nearly 20 percent.
"Corn is purely up on the planting progress report of only 4 percent -- the last time we saw that was 1993, and that was the flood year," Reilly said.
Many farmers were not able to plant corn in 1993 because of excessive rainfall and flooding in major crop areas adjoining the Mississippi River. It is not likely that will happen this season, but the current wet weather and forecasts for more rain are beginning to worry the corn market.
The snail's pace of corn sowings was threatening to cut into U.S. corn production at a time every bushel counts in the attempt to produce enough for livestock feed, exports and the growing green fuels industry. Corn is the foundation for the ethanol business in the United States.
ARGENTINE LABOR SNAFUS BOOST SOY
Chicago soy for May delivery ended up 59-1/4 cents at $13.74-3/4 per bushel.
The soybean market rallied as Argentine farmers threaten a second strike this year, which could cripple South American soy exports at a time demand for soy remains extremely strong.
"Farmers are meeting with government leaders this afternoon and their mood is sour ... especially about soybeans," Sernatinger said.
Trade sources in Buenos Aires said soy crushers were stocking up on supplies, fearing a strike.
"Every report from the Argentine labor negotiations is negative and if they go on strike again, the bean market will really pop," said Vic Lespinasse, analyst for grainanalyst.com said.
Farmers suspended the previous strike on April 2 for 30 days and there are now concerns that farmers will strike again on May 2.
"People are speculating largely on rumors that farmers are becoming more agitated with the government ... farmers are upset about the government's export taxes on oilseeds and products," Reilly said.
Wheat prices were lagging because global wheat producers are expected to sharply boost wheat production above last year.
May delivery wheat ended up 6 cents at $8.51-3/4 per bushel.
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